South African Airways (SAA) has again been pitched into turmoil after president and chief executive Andre Viljoen resigned unexpectedly, two years before his contract was due to expire.
The move comes as SAA's financial position remains weak, possibly forcing the South African government to provide further credit guarantees in addition to the R5.5 billion ($890 million) loss sustained in the year ending March 2003. The airline suffered a huge foreign currency loss during the year after fixing the rate at which it would buy dollars to help meet foreign exchange payments on 41 Airbuses ordered in 2002. The value of the rand subsequently rose 28%.
Political fallout from the loss was said to have been behind the departure of chief financial officer Richard Forson - who had replaced Viljoen - although Forson insisted at the time that he had left for "purely personal reasons". Sources indicate that the current CFO, Mike Bond, may leave to run Air Tanzania.
In June, South Africa's public enterprises minister Alec Erwin postponed the listing of SAA, citing poor market conditions. He was critical of the airline's corporate structure. "You cannot have an IPO without a sound corporate structure," he said.
Source: Flight International