New storm hits SAA as acting CEO suspended
AFTER less than four months in the position, South African Airways (SAA) acting CEO Vuyisile Kona has been suspended from his job.
He had replaced Siza Mzimela in October, after the national carrier had reported a R1.25bn loss, less than enthusiastic support from the Treasury and an atmosphere of mistrust at the airline.
SAA was also rocked last year by the resignation of most of its board, including its chairwoman Cheryl Carolus, who cited concern about a lack of support from the airline’s shareholder, the Department of Public Enterprises.
Since 2009, the airline has had three CEOs, including Mr Kona.
On Monday night, the airline’s board issued a terse statement saying Mr Kona had been placed on “precautionary suspension” after “careful consideration of recent developments”.
The board said it had asked Mango CE Nico Bezuidenhout to oversee the group’s operations “in the interim”.
The statement did not provide much detail on the reasons for Mr Kona’s suspension, which became effective on Monday. “This is based on certain allegations that have come to the attention of the board, in respect of which the board has a fiduciary duty to investigate,” the statement read.
“It must be stressed that the board has not come to any conclusion as to the veracity or otherwise of these allegations.”
The SAA board has started a process to recruit a permanent CEO. Applications had been received, and were being evaluated. “The board is confident that this process will be completed by March 31, at which time recommendations will be presented to the minister (of public enterprises),” the statement read.
Mr Kona was previously the head of SAA’s subsidiaries and left in 2006 after reaching a legal settlement with the airline.
He returned to the airline in October when he was appointed chairman of the board and acting CEO by Public Enterprises Minister Malusi Gigaba.
But SAA board members complained almost immediately that it was not good corporate governance for a chairman to act as CEO too.
The board proposed that Mr Gigaba appoint an acting chairman of SAA until a permanent CEO was appointed — and that Mr Kona act as CEO until then.
It said it believed that there should be a clear separation of board and executive management functions to ensure it exercised independent oversight. Mr Gigaba said he agreed with the view of the board, and gave them three months from October 15 to find a new CEO.
The Treasury issued SAA with a letter of guarantee for R5bn, also in October last year, allowing it to borrow in the financial markets to buy new aircraft.
Mr Kona’s first task was to draw up new business plans for SAA, South African Express and SAA franchisee SA Airlink.
He formed a committee, comprising himself, SA Express CEO Inati Ntshanga and Mr Bezuidenhout, along with the Department of Public Enterprises’ aviation team, to draft a model for the state’s airlines.
Mr Kona intimated that he favoured consolidation, as larger airlines were better protected from the vagaries of a “toxic” market.
But he also supported the national carrier buying the latest aircraft — particularly because it would cut its fuel bill — which he promised to use “on the right routes”.
Mr Kona said everything — including fuel contracts, catering services and technical and maintenance divisions — was being scrutinised for efficiency.
“Our chairperson (Dudu Myeni) has told us she wants us to do more; it cannot be business as usual at SAA,” he said in an interview last month.
Last month, a dispute over the recognition of a trade union at SAA gave the first indication that trouble was brewing between the airline’s board and Mr Kona.
Co-operation between the management and the board of the loss-making airline is crucial as they are crafting a strategy to present to the Treasury to secure more funding.
A letter sent to the National Transport Movement union last month by SAA board member and acting chairwoman of its remuneration committee, Lindi Nkosi-Thomas, said that any promises made to the new union by Mr Kona were “null and void”.
Mr Kona had negotiated a last-minute suspension of the union’s strike in support of its attempt to gain recognition at the airline.
The union’s deputy secretary-general, Liver Mngomezulu, said presciently at the time: “SAA has a leadership problem. We told Mr Kona about the letter saying his promises were null and void. He is not even aware of the letter, which shows that there is a serious leadership problem at SAA.”
The trade union eventually went on strike.