South Africa's state airline to reorganise in turnaround drive

JOHANNESBURG (Reuters) - South Africa's struggling state-owned airline will reorganise into three business units as part of a revamp plan that could also involve the partial sale of its catering unit, its chief executive officer said on Monday.

Vuyani Jarana said during a briefing that South African Airways (SAA), which hasn't made a profit since 2011, would organise itself into domestic, regional and international business units.

Each unit will have its own management, rather than decisions being centralised, in a bid to make the airline more agile and increase accountability.

"We are evolving into an operating model of three business units," Jarana told the briefing.

"We want to build a new SAA, fit for the future, place the right people in the right job," he added.

President Cyril Ramaphosa has been at pains to stabilise ailing firms like SAA, which survive on government handouts and weigh on confidence in Africa's most industrialised economy, but the extent of their financial difficulties has meant slow progress.

Jarana also said the firm was exploring the partial sale of its catering unit, Air Chefs, as part of the restructuring.

SAA, which expects to make another large financial loss this year, hopes to turn a profit by 2021 via restructuring and cutting jobs and routes.

But its finances were dealt another blow last week when it was ordered to pay 1.1 billion rand ($78 million) to rival Comair to settle an anti-competition case.

($1 = 14.0881 rand)

(Reporting by Olivia Kumwenda-Mtambo and Tiisetso Motsoeneng; Writing by Emma Rumney; Editing by Kirsten Donovan and Mark Potter)

First Published: 2019-02-18 11:03:24
Updated 2019-02-18 12:18:32

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