SAA will name new chief by end of year
Many names on list
October 28, 2009
By SLINDILE KHANYILE
SAA would announce its new group chief executive before the end of the year, Chris Smyth, the acting chief executive, said yesterday.
There were quite a few people in the running and Smyth confirmed that he had been considered.
SAA has been without a permanent chief executive since the axing of Khaya Ngqula eight months ago. Smyth was keen to do the job permanently.
"Yes, I have enjoyed the past eight months," he said. "It has been great fun. I am enthusiastic about the future of this company and I would like to be a part of it. But if another person is appointed, I would be happy to serve under them."
Last month, the parastatal reported that the restructuring undertaken for two years had been successful. The firm was operationally sound and on the path to becoming financially sound as well.
There had been calls in some quarters to privatise SAA. Smyth said this was a decision that should be left to the shareholder, but added that it did not matter who owned the airline as long as it was permitted to run commercially.
"Five years ago, maybe, I would have said yes because history showed that state-owned airlines did not do well. But today, things are different," he said.
"Government-owned airlines are some of the most profitable," said Smyth.
Meanwhile, SAA was in talks with Continental Airlines as it wanted to expand in North America.
Continental Airlines officially joined the Star Alliance network this week. Talks between the airlines were ongoing, though nothing had been implemented yet. It would make it easier to conclude talks now that they belonged to one airline organisation.
"Continental is very attractive because it is in New Jersey and Houston, and those are places we don't go to at the moment," Smyth said. "Now that they are part of Star Alliance, the talks will be easier."
Continental Airlines is the world's fifth-largest airline and has more than 2 750 daily departures in America, Europe and Asia. At present, SAA flies directly to New York and Washington. Two months ago, it formed a partnership with Virgin America.
Jason Kruse, the head of business development at SAA, said the Special Pay Rate would enable passengers to use one ticket from South Africa to connect a Virgin America flight once in New York.
The deal was mainly for the flight from New York to Los Angeles. Despite spreading its presence in North America, Smyth said the airline would look at Africa, the Far East, particularly China, and South America for future growth.
"It may mean that we will withdraw from the less profitable routes. I must say that withdrawing from routes does not mean that the airline is in trouble," said Smyth, who would not divulge the African routes the company had identified. Nor would he disclose those that were not performing well, saying the information would be revealed in due course.
SAA flies 20 direct routes into Africa daily. The region has helped the national carrier mitigate declining air traffic. Smyth said Africa remained resilient as most of the activities were developmental.
Africa generates 20 percent and 40 percent of revenue and profit, respectively, for SAA. In the year to March, the airline made a R398 million profit, while total airline income was up 19 percent to R26.4 billion. Passenger revenue was R17.3bn.
Globally, airlines have struggled as demand for their services shrank. Smyth said there would be an upturn, but it was difficult to say when.
"This year (2009/10) is tougher than last year where only six months were affected. But we expect to break even," said Smyth.
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