[dropcap]S[/dropcap]outh African Airways has identified Vodacom Group executive Vuyani Jarana as the leading candidate to become the struggling state-owned carrier’s first permanent CEO since November 2015, according to three people familiar with the matter.
The debt-laden airline hasn’t made a profit since 2011 and is in talks with banks about repaying or refinancing R8.9bn of loans due at the end of the week. The carrier needs an experienced executive from the private sector to turn it around, said one of the people, who asked not to be named because the information isn’t public.
Jarana, 46, has been head of Vodacom’s enterprise division since 2012 and was previously chief operating officer of the Johannesburg-based wireless carrier. He is the preferred choice of a number of board members appointed to SAA by the national treasury last year, one of the people said. Chairwoman Dudu Myeni, who also heads President Jacob Zuma’s charitable foundation, prefers a different candidate, the person said.
Jarana declined to comment.
The identity of SAA’s new CEO “is currently under consideration by the shareholder”, spokesman Tlali Tlali said by e-mail, referring to the national treasury. “The shareholder department may decide to table the name of the recommended candidate to cabinet for final approval. We have to wait until all these processes have been finalised before we could know and announce the CEO designate.”
Jarana hasn’t been offered a job by SAA and is focused on delivering Vodacom’s business strategy, a spokesman for Vodacom said in an e-mailed response to questions. Treasury spokeswoman Yolisa Tyantsi couldn’t immediately comment when contacted by phone.
After the board identifies a candidate the name will to be presented to finance minister Malusi Gigaba, who will seek cabinet approval for the appointment, the second person said. Only then can an offer be made to the candidate, adding that the process could take until the end of July. The Sunday Times reported last week that Myeni attempted to halt an SAA board meeting aimed at approving Jarana’s nomination, as she doesn’t approve of the candidate.
SAA has been run on an acting basis by chief technical officer Musa Zwane since 2015. He is the seventh permanent or temporary CEO of the airline since 2010.
On Tuesday, SAA and national treasury said they are in talks with lenders about settling R2.3bn of R8.9bn in loans due at the end of this week after one of the banks refused to ease the debt’s terms. The airline has been relying on government debt guarantees in order to remain solvent.
Vodacom, 65% owned by Vodafone Group, is the market leader in South Africa with 37m subscribers in the country. It also has customers in Tanzania, Mozambique and the Democratic Republic of Congo. — Reported with assistance from Sam Mkokeli, (c) 2017 Bloomberg LP