JOHANNESBURG- South African Airways is planning to revive a plan to find an equity partner that is able to provide cash and operational savings to help turn around the state airline, according to its new CEO.
Vuyani Jarana, CEO said in an interview that a strategic investor would ideally be from within the aviation industry. This will allow the unprofitable SAA to share costs, improve customer service and gain a capital injection, he added.
“You don’t just want a pure investor such as private equity. With a strong equity partner that has operations elsewhere, you are able to leverage from each other’s capabilities,” Jarana said.
The success of this search would solve SAA’s most pressing challenge facing Jarana. This is also a revival of a plan by the former Minister of Finance Pravin Gordhan in his February 2016 budget speech, though the formation of the new board to lead this search was finalised last month.
Jarana is the first permanent CEO at SAA for more than two years.
SAA’s main strength is a 55% share of the South African market, which include contributions from low cost carrier SA Express and Mango.
They also compete mainly with Kenya Airways and Ethiopia Airlines Enterprise. Jarana says “If we want to seriously compete against other big players in Africa and Middle Eastern carriers, we need to refresh the product.”