'Jarana was allowed to do at SAA what a lot of CEOs didn't get to do'

South African Airways (SAA) chief executive officer (CEO) Vuyani Jarana tendered his resignation over the weekend.

Jarana has become the second CEO of a major state-owned entity to resign after Eskom CEO Phakamani Hadebe announced his resignation a few weeks ago.

In his resignation, Jarana described how his strategy to turnaround the national carrier was systematically undermined.

Read: Jarana's resignation raises concerns about SAA board's powers - researcher

Questions have been asked as to what is happening at this particular state-owned entity?

To explain what is happening at the SOE, Eusebius McKaiser chats to Mail & Guardian investigative reporter Sabelo Sikiti.

We are still trying to get to grips with the actual reasons as to why Jarana resigned, and part of what he says in his resignation letter is that there was no shareholder support. Jarana says: 'I have told them that this is how much money the turnaround strategy needs, they have advanced to me thus far about R3.5 bn, I was expecting to get these payments in tranches so that when we get to 2021, the airline can sustain itself.'

Sabelo Sikiti, Investigative reporter - Mail & Guardian

Sikiti says Jarana's statement is broad because the turnaround strategy is not something that he adopted himself as it went through all the stages and was even passed in Parliament.

Why would the government commit to something that they are now seemingly unable to fund? That is one aspect. Jarana has been there since November 2017, and this is the first time he spoke about any sort of challenges at SAA.

Sabelo Sikiti, Investigative reporter - Mail & Guardian

Jarana has probably been given the most amount of leeway that any CEO at SAA has had in quite a long time, Sikiti notes.

Jarana was allowed to do at SAA what a lot of CEOs at the company didn't get to do if you look at the millions that he spent bringing in consultants before he even started in that office. The board created a position for chief reorganisation officer, a person who will look after the day-to-day running from an aviation point of view so that Jarana can focus on the financial and business development aspects. That wasn't done for any other CEO.

Sabelo Sikiti, Investigative reporter - Mail & Guardian

Furthermore, Jarana spent some time with Bain & Company before taking office, being taken through on what the task of being SAA CEO would entail, Sikiti adds.

On top of that, Jarana brought four more consultants from the UK and that was another expensive exercise. He was also allowed to bring in six or seven executives into his office. As a result of all of this, SAA is sitting at the CCMA with its former chief operations officer and former chief financial officer, people he got rid of and bring in his own people. So when you talk about support what do you mean?

Sabelo Sikiti, Investigative reporter - Mail & Guardian

He says the SAA story goes beyond just business.

The story is one of the patronage networks, one of procurement spent. Every time a new CEO comes in at SAA, you will get a lot of people that have been there telling us that this CEO is trying to bring in a particular company to do debt restructuring and so forth. That is the story of Transnet, and that is the story at Eskom.

Sabelo Sikiti, Investigative reporter - Mail & Guardian

Listen below to the full explainer of Jarana's resignation and what is happening at the parastatal:


This article first appeared on 702 : 'Jarana was allowed to do at SAA what a lot of CEOs didn't get to do'


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