South African Airways (SAA) appointed its head of operations as acting chief executive on Friday and said it needs R4 billion ($265 million) from the government to survive the current financial year and allow it to renegotiate loan terms with banks.
Zukisa Ramasia becomes interim CEO after Vuyani Jarana unexpectedly resigned on Sunday, after less than two years in the job, saying his turnaround strategy for the loss-making airline was being undermined by a lack of state funding and too much bureaucracy.
Read: Goodbye, SAA
SAA has not made a profit since 2011 and Jarana launched a five-year turnaround plan that includes slashing costs and cancelling unprofitable routes, requiring around R21.7 billion ($1.5 billion) in cash injections from the government.
“We are currently operating at a loss and that is the background to the request we’ve made for R4 billion of support for the current financial year,” board member Martin Kingston told a news briefing.
“We are in discussion with lenders about repaying the R3.5 billion (due in July) and extending the R9.2 billion (of other debt) over a protracted period of time.”
“Repaying the R3.5 billion opens the door for us to access additional liquidity for the current financial year,” said Kingston.
Jarana’s departure from SAA followed the resignation of power utility Eskom’s chief executive Phakamani Hadebe last month, who had also been trying to stabilise his highly indebted company, highlighting the mammoth task South African President Cyril Ramaphosa faces to fulfil his promise to reform state firms and wean them off government support.