SAA to restructure into three units but denies unbundling

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CAPE TOWN, February 18 – Struggling South African Airways on Monday announced plans to restructure the carrier into three business units for domestic, regional and international services.

The split was communicated by SAA CEO Vuyani Jarana in a briefing to stakeholders.

SAA spokesman Tlali Tlali denied reports of an unbundling of the airline, sparked by Jarana’s remarks.

“A part of the message was lost in translation if you like…. it is essentially about the evolution of our operating model,” Tlali told EWN in an interview.

He said it meant there would be an internal reconfiguration of resources, aimed at bringing more efficiency and accountability, and debunking the notion that the airline was a loss-making company that lacked any “precision management”.

“It is only about how we reconfigure our internal resources.”

SAA received considerable financial support from government during the course of the year to prevent if from defaulting on loan repayments. It was given a R5 billion lifeline in the medium term budget policy statement in October, but says that it needs a total of more than R21 billion over three years to enable it to break even by 2021.

“One of the key requirements is for us to get funding in the form of R21.7 billion,” Tlali said, adding that the airline was waiting to hear from government whether the balance of this amount would be availed to it.

The carrier last turned a profit in 2011. (ANA)