Bail-out SAA spending heavily on executives and consultants
CEO Vuyani Jarana says increased spending is needed to address a skills shortage at the state-owned airline
Just days after getting a R5bn bail-out from National Treasury‚ it is being reported that South African Airways (SAA) is spending millions on executives and consulting firms.
Recently appointed CEO Vuyani Jarana said increased spending was needed to address a skills shortage at the airline‚ according to a report in the Mail & Guardian on Friday.
The newspaper reported that there had been seven "expensive new appointments"‚ some executive positions had been upgraded and that R25m was being paid to Deutsche Bank to help restructure the airline’s debt.
"This is at a time when the airline‚ which reported losses of R5.6bn in the 2016-17 financial year‚ has shed a staggering R3.8bn in revenue by cutting several domestic and international routes‚ and is paying for at least 50 pilots and cabin crew who have no work to do‚" the newspaper reported.
Some of the staff were reportedly being paid salaries of between R4.2m and R6m a year.
The spending was a direct contradiction to Eskom‚ which is curbing costs and is offering no wage increases to staff.
SAA‚ through spokesman spokesperson Tlali Tlali‚ said the airline would not comment on confidential employee remuneration and defended the use of consultants‚ saying the airline did not have the capacity to restructure its R9.2bn debt.
TimesLIVE reported on Monday that Jarana had accepted a challenge from Free Market Foundation executive director Leon Louw to pay R100‚000 to charity if his three-year turnaround plan for the airline did not succeed.
Louw said he was willing to wager Jarana R100‚000 that his three-year plan would not work and that by March 31 2021 — Jarana’s stated timeframe — SAA would not be in profit.