Stakeholders blame government for SAA CEO shocking resignation

South Africa’s aviation experts have blamed the impromptu resignation of South African Airways CEO, Vuyani Jarana on the “interference” by the South African government, owners of the airline.

Recall that Jarana, who was appointed in August 2017, had tendered his resignation to South African Airways (SAA) board Chairperson JB Magwaza in a letter dated May 29, 2019.

The CEO cited uncertainty about funding, and bureaucracy which delayed decision making necessary to turnaround the ailing airline, as reasons for his resignation.

He left his five-year stint as the chief officer of Vodacom Business, to become the eighth person since 2010 – either a permanent or interim basis – tasked with turning around the fortunes of SAA.

ALSO READ: 737 Max 8: Boeing admits error in software

Jarana replaced the company’s chief technical officer, Musa Zwane, who was acting in the position since 2015.

Reacting to his shocking resignation, one of the experts who wanted to remain anonymous, said that one of the hurdles for Jarana at SAA was most likely “interference” by the stakeholder – in other words, government.

“When a CEO is put in charge of an airline, he or she must be allowed to be in charge. The ‘owners’ should exercise oversight, but not exercise control over management. They should have a hands-off approach,” he said.

“You must give the person you appoint as CEO the opportunity to execute on a strategy. Jarana’s strategy would have led to a sustainable business case for SAA.”

In the expert’s view not only does SAA’s high debt situation need to be addressed, but there needs to be restructuring of the company to ensure that “people with the right skills are placed in the right positions” to fix the business model.

Some of the experts argued that it is important for SAA to put resources where it would positively impact customers the most – something which Jarana was busy doing. Jarana was also busy looking at optimising SAA’s routes, which in the view of the expert was a good thing.

“SAA was in the middle of this process when the sudden announcement of Jarana’s resignation came. It takes time to see the success of these changes, but at least Jarana started to pave the road to success,” said the expert.

According to the CEO of the Airlines Association of Southern Africa (AASA), Chris Zweigenthal, the work he was doing was contributing to the overall wellbeing and sustainability of the airline industry in the region.”

“I worked with him as CEO of SAA and a member of the AASA executive committee and his vision has always been one of implementing a turnaround strategy which would ultimately turn SAA into a sustainable profitable airline,” Zweigenthal told Fin24 on the sidelines of the AGM.

Zweigenthal emphasised the importance of having a healthy aviation industry. “It does not help if our airlines go through tough times. We are disappointed to hear of his (Jarana’s) resignation, but thank him for what he has done for the industry,” he added.