SAA turbulence laid bare at commission

Any lingering doubts that SAA is more of a dodo than a once-proud national carrier were surely laid to rest at this week’s Zondo hearings. Legalbrief reports that allegations of corruption, mismanagement, jobs for pals, a fake whistle-blower campaign, a presidential proposal to launch a new route to a war-zone and a food (tender) fight were unpacked at the commission which is tasked with investigating allegations of graft in the public sector. The same airline that now stands accused of using unlicensed pilots was guided by board chairperson Dudu Myeni and former head of the audit and risk committee Yakhe Kwinana who allegedly instructed the executive committee to make appointments without following procedures. That’s according to human resources general manager Mathulwane Mpshe who said she often refused these orders which led to her being suspended. A report on the EWN site notes that Mpshe said that the pair also ignored warnings from National Treasury against implementing unlawful instructions. A TimesLIVE report notes that Mpshe gave two examples of such interference, the first being the appointment of Captain Mpho Mamashela as COO, an instruction allegedly handed down by Myeni in March 2015. ‘We had started the section 189 process of retrenchments. This position of COO was not even in the organisational structure of SAA at the time. However, Mpshe didn't carry out the order. Mpshe said she was also told to appoint Eric Manentsa as head of flight operations during a risk and management committee (Ramco) meeting. ‘(Manentsa) was chief pilot at the time. On this instruction, I raised my concerns at the Ramco meeting to say that I find it highly irregular that a member of the board will raise an issue like this in Ramco,’ Mpshe said. Mpshe is one of the witnesses who Myeni has applied to cross-examine.

Myeni allegedly ordered that a lucrative catering contract be given to a company on whose board she served. According to a TimesLIVE report, the contracts, for catering services at airport lounges, was allegedly withdrawn from the successful bidder. In August 2015, SAA awarded a three-year R85m contract to LSG Sky Chefs. It came after the airline received numerous complaints over the quality of food from its previous service provider, Air Chefs, which is a subsidiary of SAA. Mpshe said even though LSG's holding company Lufthansa was registered in Germany, it had met the required BEE credentials and promised to absorb Air Chef's staff to prevent any loss of jobs. Mpshe, at the time the contract was awarded, was the acting chief executive officer at the airline. But a month after the contract was awarded, Mpshe says Myeni had brought the matter to the attention of Parliament, stating that the airline had awarded the tender to a foreign entity. This, Mpshe said, had raised criticism from opposition parties. After the parliamentary briefing, Mpshe remembers Myeni asking her: ‘Does it mean that black people can't cook?’

And Mpshe claimed fake whistle-blower reports were drafted at Internet cafés with the intention to get several SAA executives who disagreed with Myeni fired. According to a Cape Times report, she said Kwinana tried to force her to hire a Johannesburg-based law firm to conduct a forensic investigation into two senior SAA executives. She said the law firm, Boqwana Benz, was not on their procurement database and she refused to do so. Mpshe said several other law firms and auditing companies were also appointed to conduct investigations into officials who allegedly disagreed with Myeni on the financial and procurement affairs of the airline. According to evidence before the commission, some of the officials were fired based on ‘fake whistle-blower reports’. The commission heard that Kwinina in her meetings with Duvenage verbally confessed that they fabricated whistle-blower reports which were ultimately used to fire the executives.

In another startling revelation, Mpshe testified that former President Jacob Zuma wanted SAA to begin commercial flights to war-torn South Sudan even though the airspace was closed for commercial traffic. According to a report in Die Burger, Mpshe said Myeni had instructed her to execute Zuma’s wishes. The instruction was conveyed to former SAA commercial head Sylvain Bosc who protested that it was not possible and that SAA wouldn’t have any insurance if it operated such a flight. Myeni allegedly claimed that it was not a problem as the government would pay should something happen. Mpshe also testified that Myeni instructed executives to set up a flight between Johannesburg and Durban as they were not satisfied using low-cost carrier Mango and economy class. Bosc again said it wasn’t feasible and he was then suspended.

Legalbrief reports that the airline has had bailouts of over R15bn over the last two years. Public Enterprises Minister Pravin Gordhan has warned that the company change its ‘culture of entitlement’.‘We are in the process of strengthening the company executive and the board to ensure stability in the organisation. A joint implementation committee has been established between management, the board and my department to accelerate implementation, accountability and enable quick decision making,’ he told MPs last month. He also said that by 8 July, the company would have a new turnaround strategy developed for approval. ‘The airline has persistently incurred losses over the past 12 years due to mismanagement, state capture, its inability to service its debt,’ he said.

In other developments, the airline has announced that is introducing new aircraft to its ageing fleet. SAAsaid it will supplement its existing long-haul fleet with new Airbus A350-900 planes which are modern, twin-engine, and wide-body aircraft. A report on the Business Tech site notes that the aircraft will operate on one of SAA’s ultra-long-haul routes between Johannesburg and New York. ‘The introduction of these state-of-the-art aircraft to our fleet is an important step-change as we continue to make progress to transform our business and return the airline to financial sustainability in the shortest time possible,’ said acting SAA CEO, Zukisa Ramasia. SAA said that it will take delivery of the aircraft later this year and it plans to lease the planes for up to three years.