The acting CEO of SAA, Matshela Seshibe, is using his time at the AGM of the International Air Transport Association (Iata) in Rio de Janeiro to look for suitable partnerships and ways of taking the flag carrier forward in a sustainable manner.
“Going forward alliances will be a critical enabler to provide SAA’s customers with frictionless travel and seamless connections. You need partners with integrated systems and shared values to accomplish that — and that is why it is very important for me to be here and introduce myself,” he told Business Day on the sidelines of the global event.
“Iata’s AGM is a gathering of the entire ecosystem and conducive to ‘speed dating’.”
He sees SAA’s membership of the Star Alliance group of about 26 leading airlines as a good way to leverage the power of the network.
“I am here to cement some of those relationships and look for more opportunities — and others are doing the same. South Africa is an important market internationally, with Johannesburg as an economic hub and Cape Town as a destination city,” he explained.
Seshibe, the CEO of SAA’s catering subsidiary Air Chefs, took the helm of SAA in April after the resignation of John Lamola. He says that so far, his interactions with the department of transport, minister of transport Barbara Creecy, and stakeholders such as Airports Company South Africa (ACSA) and the Civil Aviation Authority (CAA) have been very positive.
“They understand the role of a national carrier to improve tourism, positively impact the economy and showcase South Africa to the outside world. They want to see us succeed,” says Seshibe. “It is not about ownership for me, but about whether the airline is run sustainably. Some of the most successful airlines in the world are state-owned but run commercially and sustainably.”
Asked how financially sound SAA really is, he admits that the financial state needs to be looked at within the context of current global challenges. The prime example is the conflict in the Middle East, which has caused the price of jet fuel to spike and ticket prices to increase sharply.
“I want to focus on having sound financial fundamentals in place to run SAA profitably. The airline started well after business rescue — a process that has been completed fully — and we grew from using just six aircraft to 19 and being a significant player in South African and regional market,” Seshibe said.
“Revenue has grown in double digits, and the business model is set for value creation and passenger attraction through good service. At the same time, the evolution of our internal governance frameworks was outpaced by activity levels on the top line, resulting in challenges in terms of irregular expenditure and reflecting the need to fix operations and accounting. We are fixing the back end while we continue to make progress in the front-end.”
The biggest challenge currently is the high price of aviation fuel. “We decided to address this strategically with a combination of targeted temporary fare increases as well as internal efficiency measures,” Seshibe said.
As for whether he has the necessary airline experience for the job, he says what is important is that he has the leadership experience needed. He was part of the formulation of SAA’s strategic focus plans, having been an executive committee member for the past two years.
“I have transformed businesses in the past and delivered results in terms of financial and commercial outcomes. Business fundamentals remain the same in all industries. Yes, it is important to gain an intimate knowledge of the airline industry, and I will continue to do so, especially understanding the needs of our customers,” he said.
For him, one approach could be not to focus on the “labels” of being a legacy carrier or a low-cost one, but to follow the best value proposition for customers, including tapping opportunities in the growing African market and in the southern hemisphere.
*Carin Smith is a freelance journalist and is attending this event as a guest of IATA
