6 minute read
- HERE TO FLY THE FLAG
Despite the controversial arrival of a strategic equity partner for SAA, Mr Thomas Kgokolo is still the CEO, albeit only an interim one. Guy Leitch asks him how he is managing a job many consider impossible.
SAA HAS HAD 20 ACTING or supposedly permanent Chief Executives in the past 10 years – and Thomas Kgokolo is the fifth in the past five years. Is this job not the ultimate ‘hospital pass’? After all, a well-qualified and experienced South African airline CEO turned the job down – twice. Kgokolo hedged his bets by accepting the job only as an Interim CEO. He says, “I told myself that I will apply my experience in business and skills to contribute to the airline’s turn around, as the success of the new SAA is a reflection on all of us as South Africans, so I am here to rebuild SAA into an airline that all South Africans can be proud of.
After all, SAA is a business like any other and I have significant business transformation experience which will enable me to relaunch the airline.” THE MAIN TASK the mix of Kgokolo says his biggest challenge
SAA pilots is the impact of the Coronavirus pandemic on the airline. “My main should be task is to get SAA back where it belongs – in the skies and flying representative the South African flag high with the intent of recapturing the hearts of our customers.” In the absence of a detailed strategic plan, he says his main aim is “to stabilise SAA during this transition, so that the airline is on a sound footing for the takeover by the new Strategic Equity Partner (SEP). The closure
SAA's new Interim CEO Thomas Kgokolo shares his plan for the embattled airline. Image supplied by SAA.
of borders continues to have a negative impact on the revenue and cash flow of the business. This situation is also making it difficult to plan for a sustainable restart,” he explains.
“The aviation industry is not in a good state; however, the long-term sustainability of the airline will be enhanced by the newly announced SEP.”
Kgokolo’s says that the next challenge is to meet the regulatory requirements. Kgokolo acknowledges that, “this will require a massive amount of work – just in terms of getting the airline back into a regulatory compliant condition.”
An immediate challenge is dealing with the long running pilots’ strike. 89% of SAA pilots were members of the SAA Pilots Association (SAAPA) and they have been in a fight to the bitter end with the airline to enforce their Regulating Agreement. At time of writing judgement has been reserved in the labour court matter between SAAPA and the airline.
Regarding the race and seniority composition of the pilot body, Kgokolo says, “Naturally, the mix of SAA pilots should be representative, in line with both their experience and the demographics of the country.”
Regarding the continued absence of a business plan, Kgokolo regards the timeous resolution of the deadlock with SAAPA as essential to enable the airline to do proper planning; “SAA’s main interest is for this issue to be resolved speedily, as it
Thomas Kgololo hopes to have SAA return to flying domestic routes in early August 2021. Image ACSA.
negatively impacts planning for the restart.”
A late May Labour Court decision dismissing an interim relief application by SAAPA preventing SAA from engaging ‘scab’ pilots and flight trainers/services during the strike means the airline can now proceed with its plans for a relaunch. Kgokolo says, “While we welcome the Labour Court decision, we remain committed to finding a workable solution to end the impasse with SAA pilots. But we are also resolute in pursuing our goal of getting SAA back in the skies in the third quarter.”
Kgokolo says, “With the announcement of the SEP, there is a palpable sense of excitement and optimism among all staff as we collectively look towards new horizons in SAA’s proud history. It would be our fervent wish that all staff, including our pilots, as well as passengers, be part of this process.”
THE SUBSIDIARIES
A further key challenge for Kgokolo as the SAA Group’s Interim Chief Executive is the airline’s three loss-making subsidiaries: Mango, SAA Technical, and Air Chefs. Kgokolo says, “One of my tasks at SAA is to support our subsidiaries until they receive the R2.7 billion Rand that has been allocated to them by the government.”
Mango was grounded at the end of April 2021, for the non-payment of fees to the Airports Company of South Africa (ACSA). 3500 passengers were left stranded.
“We are concentrating on making sure that we have improved communication with Mango’s guests so that we are all clear about the way forward,” he says.
At the same time, SAA Technical is reported to be retrenching 1200 of its 2000 staff. A key question is whether that will leave enough capacity for the support and maintenance of the SAA and Mango fleets when it relaunches? Kgokolo says that the demand for these companies’ services has changed. “They cannot keep doing the same thing while the market has radically changed due to Covid-19. We have to reposition the businesses to align them with the current challenges. But I must emphasise that we regard our employees as significant stakeholders and we are doing everything within our power to safeguard their jobs. Fortunately, we have excellent support from the SAA Board and from the DPE, as our shareholder.”
THE FLEET There is a pressing need to rebuild SAA’s fleet. During the rescue process, the Business Rescue Practitioners negotiated the return of most of its aircraft, particularly the newer one, to the lessors. The result is that the airline is left only with a few older planes no one wanted. The remaining fleet consists of three A319s, two A320s, one A330300, four A340-300s and four A340-600s. The Airbus A340s have out-dated in-flight entertainment and being four engine ‘quads’ they are fuel inefficient compared to modern twins such as the A350 and B787. Kgokolo says “Negotiations are underway to ensure that SAA has an appropriate fleet for the airline’s restart, at affordable cost. Thanks to the experience of Global Aviation with its existing fleet and flight operations capacity as a partner in the SEP, we are expecting the role of the SEP to be pertinent in the final fleet configuration.”
Despite all these challenges, plus the less tangible need to rebuild staff morale and trust in the brand from its once loyal customers, Kgokolo clearly believes that the airline has an important role as a flag carrier. “SAA is a tool for nation building and national identity. More importantly, it is a good instrument for promoting both economic and social development, especially in relation to the tourism industry, since one will have to look at the value chain when accessing the success of the national airline carrier,” he says. “My immediate action is to rebuild trust and identity to the remaining SAA employees who have gone through a difficult period. I intend leading by example and being transparent. Since to ensure that we are a customer-facing entity, it is key to ensure that
SAA has an we have motivated staff.” appropriate Kgokolo acknowledges that SAA has lost much of its fleet for the pre-COVID market share. airline’s restart “The longer SAA remains on the ground the more challenging it will be to gain momentum, particularly on regional routes. However, I still believe SAA is a good African brand, judging by social media. Our customers want us back, for the proudly South African hospitality that only SAA can provide in the market. We were once Africa’s favourite airline, and with loyal support from our customers, we are optimistic about claiming this title back.” When asked if he would be available for a permanent job as CEO at SAA, Kgokolo replied, “My task currently is to get SAA on good ground, so the SEP has the maximum chance of success. Once I accomplish this, it will be up to the SEP to make permanent appointments. Personally, it has always been my intention to start my PhD and I look forward to be able to do that in the years ahead.”
