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Will new SAA board under Magwaza manage to salvage ailing airline?

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There are some big names in the new South African Airways board announced this morning by Finance Minister Malusi Gigaba.

Gigaba appointed six new members to the board, as well as a full slate of non-executive board members.

News broke last night that President Jacob Zuma’s ally Dudu Myeni had been axed.

Read: Dudu Myeni axed as SAA chair

Joining the board is Johannes Bhekumuzi Magwaza as the new chairperson, and Nolitha Fakude as the deputy chairperson and non-executive director.

New board members who will serve as non-executive directors are Geoff Rothschild, Ahmed Bassa, Tinyiko Mhlari, and Martin Kingston. Current non-executive directors who will continue to serve on the board are Bajabulile Swazi Tshabalala, Peter Tshisevhe, Thandeka Nozipho Mogoduso, Peter Holmes Maluleka and Akhter Hoosen Moosa.

Those who were axed alongside Miyeni are Tryphosa Ramano, Mzimkulu Malunga, Siphile Buthelezi, Nazmeera Moola, and Gugu Sepamla.

The changes will be effective from November 3, when the minister will have a special meeting with the new board.

“The new board brings talent, expertise and energy to the airline, and they are all highly regarded individuals with a vast and in-depth knowledge of business in both the private and public sectors,” said Gigaba.

He hoped that the new board, together with the incoming chief executive, Vuyani Jarana, would implement the airline’s structural strategy and bring it to financial stability.

He said the new leadership was “well experienced and diverse” and encouraged them to “ignore the political noise, and focus on the business of strengthening SAA”.

He reiterated the government’s commitment to strengthening the airline, and creating conditions to see the transformation of all state-owned companies.

Myeni’s removal came in the wake of mounting pressure from lenders of the national carrier, with claims that she had been at the centre of instability.

Magwaza has decades of business leadership experience and has built up a name for himself as a director of numerous national and international companies. He is the founder of Nkunzi Investment Holdings and serves as its executive chairperson. He also holds a master’s degree in industrial relations from Warwick University in the United Kingdom, and a bachelor of arts in psychology and social anthropology from the University of Zululand.

Sasol executive director Fakude also comes with an impressive pedigree. She has also been a director of companies including Woolworths and Harmony Gold, and has held leadership positions in organisations such as the Black Management Forum. Among her qualifications is a senior executive programme certificate from Harvard Business School

Credit ratings agencies have said that SAA must be reformed and cited the cost of propping it up as a threat to South Africa’s credit rating. S&P Global Ratings and Fitch downgraded South Africa’s credit to “junk” status.

The airline runs one of Africa’s biggest fleets but is losing money. It received emergency state funds in September to help it repay loans of R3 billion to Citibank.

Magwaza’s appointment came a day after the Public Investment Corporation (PIC), one of the continent’s largest asset managers, said it had not ruled out investing in SAA.

The PIC manages South African government employee retirement funds and has been in the spotlight recently after media reports that the finance ministry requested money from the pension fund to bail out struggling state firms.

Gigaba said last month South Africa was not planning to raid the government pension fund to bail out struggling state entities.

The Democratic Alliance’s finance spokesperson, Alf Lees, welcomed the decision, saying Myeni “had done untold damage to SAA and should not have been reappointed to the board.

“Make no mistake, this reported restructuring of the SAA board and the removal of Myeni is far too little, too late to save the airline. There is no saving SAA,” Lees said.

Cope’s spokesperson Glacier Nkhwashu also welcomed “the long overdue removal” of Myeni but pointed out that her removal spoke less to positive action by Zuma, but rather to continual pressure exerted by opposition parties, civil society groupings, and financiers.

“As a consequence of Myeni’s corrupt leadership and bad governance of SAA, Zuma’s government was ultimately forced to Act. Bear in mind that Myeni was adamant that she would only leave when ‘ubaba goes’.” – Additional reporting by Reuters

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