Parliament, Wednesday, 11 September 2019 – The Select Committee on Public Enterprises and Communications was briefed by South African Express (SAX) on the airline’s financial challenges and fleet maintenance, including the implementation of the airline’s turnaround strategy.

The Acting Chairperson of the SAX board, Dr Thabi Leoka, in her opening remarks said: “We were appointed in 2017 on the day the airline was grounded, we needed to ensure we were operational before three months lapsed or South African Express would have to start from scratch. The challenge as a new board that we had to grapple with, was financial mismanagement, a weak balance sheet, low staff morale, and corruption. The airline was badly managed, and governance issues were another challenge that the board had to deal with.”

In order to turn around the airline, the board together with the executive, developed and adopted the G-POCH strategy. Dr Leoka said: “In the strategy we prioritised governance, how to grow the revenue, looking at ways to be efficient and operational, making sure that we are on time when it came to customer value and human capital. As the board we are committed in changing the state of South African Express,” said Dr Leoka.

Acting Interim CEO for SAX, Ms Siza Mzimela, said what assisted the airline was the R1.2 billion recapitalisation from government. She said it assisted the airline to deal with the insolvency issues. The money came with strict conditions and it was ring-fenced to settle only government-guaranteed debt.

Questioning SAX, the committee said the issue of transformation in the airline cannot be downplayed as the human capital does not reflect the demographics of the country. The committee said SAX lacks black female pilots. The committee was of the view that there is something wrong with the airline’s cadet training programme, as in its presentation the airline alluded to not having enough black female pilots.

Ms Mzimela said the challenge the airline is faced with is that the airline loses the majority of the pilots to bigger airlines but the programme in itself has trained black female pilots.

The committee wanted an update on the proposed merger of the state-owned entity airlines (South African Airways and Mango with SAX). The Department of Public Enterprises (DPE) said a study that was conducted found that a merger would be beneficial in the consolidation of the three airlines. The DPE said the document which supports the consolidation is now before the economic cluster and will go to the Cabinet. Ms Mzimela said they fully support the integration of the airlines, but what is of critical importance is how the merger is put together.

Members of the committee questioned if there were warning signs before the grounding of the airline. Ms Mzimela indicated that there were warning signs, the grounding was a result of people not doing what they were supposed to do.

On the issue of the SAX brand, the committee wanted to know how the airline is planning to address the reputational damage of brand SAX. The committee said in the past, SAX was seen as an exemplary airline. Ms Mzimela said the airline needs to work on its reputational brand and address the perception around safety.

The committee welcomed the turnaround strategy and said it hopes the strategy will yield its intended objectives of turning the company around and being profitable.

The issue of filling vacancies of critical positions, the committee said the board needs to prioritise the matter as the airline cannot afford to have acting positions at a strategic level.

Committee Chairperson, Mr Tshitereke Matibe, said the airline should provide updates on the previous financial statements that were not finalised.

SAX said all previous financial statements have been finalised and signed off, and they are currently waiting for an annual general meeting to be tabled there.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE SELECT COMMITTEE ON PUBLIC ENTERPRISES AND COMMUNICATIONS, MR TSHITEREKE MATIBE.

For media enquiries or interviews with the Chairperson, please contact the Committee’s Media Officer:

Name: Ms Yoliswa Landu 
Parliamentary Communication Services
Tel: 021 403 8203 
Cell: 081 497 4694
E-mail: ylandu@parliament.gov.za