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SAA to be split into three divisions

February 19, 2019 8:48 am

South Africa’s struggling state-owned airline, South African Airways will be split into three business units as part of a revamp plan that could also involve the partial sale of its catering unit, its chief executive officer said on Monday.

Vuyani Jarana said during a briefing that South African Airways (SAA), which has not made profit since 2011, would organise itself into domestic, regional and international business units.

Each unit will have its own management, rather than decisions being centralised, in a bid to make the airline more agile and increase accountability.

“We are evolving into an operating model of three business units,” Jarana told the briefing.

“We want to build a new SAA, fit for the future, place the right people in the right job,” he added.

It is believed that Finance Minister Tito Mboweni is expected to announce some type of financial assistance for the airline when he delivers his budget speech on Wednesday.

Jarana also said the firm was exploring the partial sale of its catering unit, Air Chefs, as part of the restructuring.  SAA, which expects to make another large financial loss this year, hopes to turn a profit by 2021 via restructuring and cutting jobs and routes.

But its finances were dealt another blow last week when it was ordered to pay R1.1bn ($78 million) to rival Comair to settle an anti-competition case. – BUSINESS REPORT ONLINE / REUTERS

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