South African CEO sees progress on 2021 plan

Bloomberg

South African Airways is making progress with its plan to reach profitability in the next three years, even it faces challenges such as a jump in fuel prices, Chief Executive Officer Vuyani Jarana said in an interview.
Jarana said he expects losses until the company can break even or achieve profitability at the end of the 2021 financial year as the embattled state-owned airline improves its revenue.
“I’m still quite comfortable about the execution of the plan,’’ Jarana said.
The airline reported a loss of 5.7 billion rand ($398 million) in the year ended in March, more than double what it had budgeted, and received a government bailout last year to avoid a default on debt owed to Citigroup Inc.
The management is considering a sale of the airline’s catering unit, Air Chefs, and outsourcing or selling SAA Cargo, the Johannesburg-based City Press reported Sunday, citing an internal report. It’s also headed to record a 6-billion-rand loss.
The CEO said the leaked document outlines scenarios but no final decisions have been made. He pointed out the the company’s own corporate plan forecasts losses for the next
several years.
“On revenue we’re quite happy, but other aspects are more difficult,” he said in an interview.
SAA is watching to see what competitors do about fuel hedging strategy, an unanticipated issue that’s emerged with higher oil prices, he said. The airline has used a hedging policy, “but it’s not an aggressive one,” Jarana said.
The airline’s international business and supply chain reform are core strategy topics, he said.
“We’re focussing a lot on areas where there are revenue leakages due to malfeasance,” he said.