South African Airways (SAA) has ushered in the new year with renewed resolve and focus to stabilise the business.
The 90 Day Action Plan, a road map designed to return SAA to full implementation of its Long-Term Turnaround Strategy, is on target in terms of rollout and active engagement across all levels of the company.
“The 90 Day Action Plan is proceeding to schedule,” says acting SAA CEO Nico Bezuidenhout. “Tasks completed already include a review of the SAA long-haul international network as well as a re-evaluation of fleet requirements.
“In December the airline already announced its new route between Johannesburg and Abu Dhabi along with a deeper commercial relationship with Etihad through codeshare network extensions and upped frequencies to key African destinations.
“Network optimisation is key and we expect to make more announcements regarding commercial efficiencies in the near future.”
Governance is one of the six critical interventions of the 90 Day Action Plan.
“There has also been a significant drive toward better governance with strengthened interaction between the Board and management an emphasis. There has also been resolution, in agreement with National Treasury, in terms of scheduling the postponed 2014 Annual General Meeting for late January, early February.”
Implementation of the 90 Day Action Plan is driven by the SAA ‘War Cabinet’. This small group of key senior executives in the business plays a critical role in the implementation process of the Plan, with close monitoring by the
newly constituted Board. Its twice-weekly meeting cycle ensures implementation feedback from across the business, while a weekly feedback session reports into a National Treasury Technical Team.
“The interventions managed by the ‘War Cabinet’ are directly linked to business deliverables to steer the company back onto a path of sustainability as outlined in the Long-Term Turnaround Strategy. SAA is serious about rebuilding commercial sustainability and we will achieve our objectives. SAA means business,” says Bezuidenhout.
As a consequence of the on-cue implementation of the 90 Day Action Plan, the Long-Term Turnaround Strategy is reenergised and the business is receiving full support from its Shareholder and close guidance from its Board of Directors.
The 90 Day Action Plan comprises 6 main areas of focus as approved by the newly constituted board:
* Immediately address the airline’s liquidity position, on-going solvency and medium-term funding requirements. Amongst the interventions are: addressing the solvency and liquidity of the business and engage with its Shareholder and other Stakeholders to ensure going concern status is maintained; immediate review of the SAA network to stem losses; focus on working capital optimisation; and renew cost compression efforts and expedite LTTS implementation that will immediately impact the Income and Cash Flow Statements.
* Immediate investigation of options to future-fund the business. The initiation of a process to investigate and determine options for future-funding the business.
* Substantial focus on Governance defects and remedies. Immediate investigation and correction of any governance failures within the business. This includes a wide-ranging review of processes and command and control structures within SAA with particular reference to the implementation of the LTTS.
* Legal and high-level governance. An immediate review of all contractual burdens and governance implications or defects within the legal framework of the company. This includes the review of onerous agreements, correction thereof and other matters that impact the framing of remedial activity; the re-establishment of foundation laying for LTTS implementation within a tight governance environment.
* Reorganisation and optimisation of assets. Examination of all assets in the business and reorganisation thereof in terms of the requirements of the LTTS. Further optimisation will occur in line with the approved interventions per the LTTS.
* Improved communication. SAA will reengineer its internal and external communication efforts to effectively communicate with all direct and indirect Stakeholders and South African citizens, particularly with reference to the implementation of the 90 Day Action Plan as well as the LTTS.
