Struggling national carrier SAA is splurging R35 million on bodyguards to protect five top personnel ahead of massive job cuts, according to a report in the Sunday Times.
The newspaper said the airline will give R10, 5000-a-day to bodyguards.
The bodyguards are employed by security firm Control Risks, which has been given a two year deal.
Sunday Times reported that the contract was negotiated outside normal procurement processes by new SAA CEO Vuyani Jarana.
The airline has incurred a net loss of R5.6 billion versus R1.5 billion in 2015/2016 financial year and expects that its financial situation will not be much different for full year 2017/2018.
Jarana and his team, in an attempt to return the airline to profitability, are planning to cut routes, sell part of the business and retire the airline’s inefficient aircraft.
“SAA has had many previous turnaround strategies which have not been implemented before. This time it is different: we believe the vision outlined by the board is absolutely correct, and are committed to ensuring it is put into practice,” Jarana said last week.
“We need a clean break with the past and a new approach to the future, and that is precisely what we are doing. We are acting with urgency to ensure the viability and sustainability of this crucial national asset,” says Jarana.
The five-year plan and strategy require support and funding by the shareholder. The board and the shareholder are currently evaluating the appropriate terms for such support.
The immediate focus of the strategy is on liquidity management, balance sheet restructuring, cost management as well as revenue optimisation, which are intended to stem the losses and drive profitability.
The airline said key steps already taken include:
- Improving governance by strengthening the board and its structures.
- Injecting R10-billion capital into SAA to improve its balance sheet.
- Addressing the leadership vacuum by filling key executive vacancies.
- Bringing in a depth of aviation skills by hiring the Chief Restructuring Officer (CRO).
- Implementing key market-facing initiatives aimed at stopping ongoing losses.
Furthermore, network optimisation has been implemented on the domestic, regional and international route network to improve yields.
The London route will be served by an upgraded product and reduced to a single daily service.
The airline added that these network changes are necessary as SAA’s route network remains under intense scrutiny with clear defined minimum profit margin target at route and network level. A change hub has been setup as command centre for implementation of the change initiatives.
The R10-billion capital injection from National Treasury late last year has helped restructure the balance sheet and improve SAA’s equity position.
- For more read the original article in the Sunday Times