Restructuring at SAA - loss of key staff
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Restructuring at SAA - loss of key staff
Rumour is that key staff members are resigning at SAA. I have heard that the treasurer, head of Voyager and a couple of other key finance and sales people have resigned recently.
Rats leaving a sinking ship or disagreement with the latest turnaround plans? Time will tell....
Rats leaving a sinking ship or disagreement with the latest turnaround plans? Time will tell....
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SAA - : A Modern Parable
A Japanese company (Toyota) and a South African company (South African
Airways) decided to have a canoe race on the Vaal River. Both teams
practised long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile. The SAA team, very
discouraged and depressed, decided to investigate the reason for the
crushing defeat. A team of senior managers was formed to investigate and
recommend appropriate action. The conclusion was that the Japanese had
eight people rowing and one steering, while the SAA team had eight
people steering and one rowing.
Feeling a deeper study was in order, SAA management hired a consulting
company and paid it a large amount of money for a second opinion. The
consulting company advised, of course, that too many people were
steering the boat, while not enough were rowing.
Not sure of how to utilise that information, but wanting to prevent
another loss to the Japanese, the SAA team totally re-organised the
rowing team's management structure to include four steering supervisors,
three area steering superintendents and one assistant superintendent
< TT>steering manager. It also implemented a new performance system that
would give the one person rowing the boat greater incentive to work
harder. It was called The "Rowing Team Quality First Programme," with
dinners and free pens for the rower. There was a lot of discussion about
getting new paddles, canoes and other equipment, as well as extra
holidays for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, SAA management laid off the rower for poor performance,
halted development of a new canoe, sold the paddles and cancelled all
capital investments for new equipment. The money saved was distributed
to executives as bonuses and the team outsourced to India.
A Japanese company (Toyota) and a South African company (South African
Airways) decided to have a canoe race on the Vaal River. Both teams
practised long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile. The SAA team, very
discouraged and depressed, decided to investigate the reason for the
crushing defeat. A team of senior managers was formed to investigate and
recommend appropriate action. The conclusion was that the Japanese had
eight people rowing and one steering, while the SAA team had eight
people steering and one rowing.
Feeling a deeper study was in order, SAA management hired a consulting
company and paid it a large amount of money for a second opinion. The
consulting company advised, of course, that too many people were
steering the boat, while not enough were rowing.
Not sure of how to utilise that information, but wanting to prevent
another loss to the Japanese, the SAA team totally re-organised the
rowing team's management structure to include four steering supervisors,
three area steering superintendents and one assistant superintendent
< TT>steering manager. It also implemented a new performance system that
would give the one person rowing the boat greater incentive to work
harder. It was called The "Rowing Team Quality First Programme," with
dinners and free pens for the rower. There was a lot of discussion about
getting new paddles, canoes and other equipment, as well as extra
holidays for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, SAA management laid off the rower for poor performance,
halted development of a new canoe, sold the paddles and cancelled all
capital investments for new equipment. The money saved was distributed
to executives as bonuses and the team outsourced to India.
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"Interesting that you think someone in the Finance department is a " Key Staff Member".
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Updates
Just got confirmation of the following:
1) Group Treasurer and Head of Fuel Management have resigned and are going to Etihad
2) Head of Tax, Head of Insurance, Head of Compliance and his 2IC, Head of SA sales have all resigned.
3) 30% management headcount reduction has been announced. With all the resignations this may not even be neccesary!
4) 747 are going to be parked
5) Negotiations with labour (inlcuding pilots) will commence soon to cut down on benefits.
1) Group Treasurer and Head of Fuel Management have resigned and are going to Etihad
2) Head of Tax, Head of Insurance, Head of Compliance and his 2IC, Head of SA sales have all resigned.
3) 30% management headcount reduction has been announced. With all the resignations this may not even be neccesary!
4) 747 are going to be parked
5) Negotiations with labour (inlcuding pilots) will commence soon to cut down on benefits.
I'm sure I remember reading threads from disenchanted SAA pilots complainingabout poor management decisions, wastage from the top etc?
Now that SAA are trimming back on the management suddenly they all knew what they were doing, despite the financial mess the airline is in!!
Resigned , or given the chance to resign? Either way, to an outsider it seems that the ruthless steps that it was claimed were needed are now being taken.
Sure it is hard for anyone to be made redundant, I know because it has happened a couple of times to me in my time in aviation. If it allows SAA to grow healthily again then it will be worth the pain.
Now that SAA are trimming back on the management suddenly they all knew what they were doing, despite the financial mess the airline is in!!
Resigned , or given the chance to resign? Either way, to an outsider it seems that the ruthless steps that it was claimed were needed are now being taken.
Sure it is hard for anyone to be made redundant, I know because it has happened a couple of times to me in my time in aviation. If it allows SAA to grow healthily again then it will be worth the pain.
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jumping ship
Problem is that some of these fellow are really good at what they do - their good work just gets ph*cked up by bad/no decision making from the executive and the board.
In my experience the good guys are always the first to go and some of these guys have clearly made up their minds even before it was clear that they would be cut. Guys like Etihad wouldn't hire anyone off the street and certainly not people that are part of the problem at SAA, would they?
I have also heard that many of those that have resigned were actually going to be part of the new structures post rationalisation. With their departure, the structures have had to be hastily revised, leaving SAA with a serious lack of depth.
In my experience the good guys are always the first to go and some of these guys have clearly made up their minds even before it was clear that they would be cut. Guys like Etihad wouldn't hire anyone off the street and certainly not people that are part of the problem at SAA, would they?
I have also heard that many of those that have resigned were actually going to be part of the new structures post rationalisation. With their departure, the structures have had to be hastily revised, leaving SAA with a serious lack of depth.
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June 4, 2007
State-owned South African Airways announced on Monday it was embarking on a restructuring plan in a bid to return to profitability within 18 months.
SAA said the move, which involves spinning off non-flight operations into seven subsidiaries, was expected to result in a ZAR2.7 billion rand (USD$378.8 million) turnaround over the next 12 to 18 months.
"In the face of a high cost base created by, amongst other things, uncompetitive ownership and aircraft lease costs, excessive head count and fuel price volatility, SAA must overhaul its entire business if it wants to survive," SAA Chief Executive Khaya Ngqula said in a statement.
SAA said it may seek outside equity partners for some of its unbundled units and that Air Chefs, the airline's catering supplier, and Galileo, the platform for the travel industry, would be sold outright.
"In principle, SAA needs to focus on its core businesses, and our core business is the movement of people and goods by air. Going forward we will focus on our strengths and explore the myriad opportunities for growth especially in the African market," Ngqula said.
The airline said the proposed timeline for completion of the plan was December 2008.
South Africa's public enterprises minister said in January an initial public offering of SAA could be years away and that the government had no plans to bail out the struggling airline.
The airliner said part of its fleet -- one owned and five leased B747-400 aircraft which are expensive to operate -- would be grounded.
SAA also announced that it would close the Paris route, which has been losing money, in October.
SAA posted a 90 percent fall in profit last year as fuel costs rocketed and said it would consider selling shares only when it had reduced its debts.
At the end of March last year, long-term liabilities amounted to ZAR4.6 billion (USD$645.4 million), while capital and reserves were ZAR1.179 billion (USD$165.4 million).
(Reuters)
Personally, I think Khaya Nquala is part of the problem, not part of the solution, but he's protected by BEE rules, nepotism, and the colour of his skin. Nothing new there.
State-owned South African Airways announced on Monday it was embarking on a restructuring plan in a bid to return to profitability within 18 months.
SAA said the move, which involves spinning off non-flight operations into seven subsidiaries, was expected to result in a ZAR2.7 billion rand (USD$378.8 million) turnaround over the next 12 to 18 months.
"In the face of a high cost base created by, amongst other things, uncompetitive ownership and aircraft lease costs, excessive head count and fuel price volatility, SAA must overhaul its entire business if it wants to survive," SAA Chief Executive Khaya Ngqula said in a statement.
SAA said it may seek outside equity partners for some of its unbundled units and that Air Chefs, the airline's catering supplier, and Galileo, the platform for the travel industry, would be sold outright.
"In principle, SAA needs to focus on its core businesses, and our core business is the movement of people and goods by air. Going forward we will focus on our strengths and explore the myriad opportunities for growth especially in the African market," Ngqula said.
The airline said the proposed timeline for completion of the plan was December 2008.
South Africa's public enterprises minister said in January an initial public offering of SAA could be years away and that the government had no plans to bail out the struggling airline.
The airliner said part of its fleet -- one owned and five leased B747-400 aircraft which are expensive to operate -- would be grounded.
SAA also announced that it would close the Paris route, which has been losing money, in October.
SAA posted a 90 percent fall in profit last year as fuel costs rocketed and said it would consider selling shares only when it had reduced its debts.
At the end of March last year, long-term liabilities amounted to ZAR4.6 billion (USD$645.4 million), while capital and reserves were ZAR1.179 billion (USD$165.4 million).
(Reuters)
Personally, I think Khaya Nquala is part of the problem, not part of the solution, but he's protected by BEE rules, nepotism, and the colour of his skin. Nothing new there.
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When will the grounding take place and whats happening to all the 747 drivers?
Will there be any pilot cuts? - If so, why then did they relatively recently employ more than 20 new piilots?
Whats SAAPA's take on the whole situation?
Will there be any pilot cuts? - If so, why then did they relatively recently employ more than 20 new piilots?
Whats SAAPA's take on the whole situation?
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"We will win back our customers" Khaya Ngqula CEO, South African Airways
South African Airways major part of the new restructuring plan which will go ahead with goverment backing, will be to retire the remaining five 747-400 leases.
Costing the airline R500m in losses a year for the 747 operated Johannesburg - London route, SAA bids goodbye to its remaining 5 747's whose leasing prices are currently double those on the market at R1.3bn compared to the usual R660bn for leasing an average 747 anually.
Khaya Ngqula the CEO, announced 2 will depart the fleet by 2008, and the final 3 by 2010. The aircraft to replace them is at the moment unknown to the public.
However, the CEO was open to admit that SAA are "toes" in relation to service compared to their competitors, and the losses are partly from lack of loyal customers on the competitive London route. BA and Virgin now offer far superior services to SAA's ageing 747 product, and Ngqula said he was going to do something about it; to "win back our customers." With a focus to introduce even higher levels than that of the new A340-300/600 products, including improved service effeciency. Training for the staff is also an option in consideration.
This is just part of SAA's major restructuing plan for the next few years. It is similar to that of Air Canada's and Qantas' both of which have been a success. In fact, Khaya Ngqula's confidence in the airline is very good to hear, and he exclaimed even if he did not have goverment backing, he would put "his own money and possessions" into the airline which he believes "has a very optimistic future."
He was challenged about the unfair playing of SAA's recent history in relation to paying travel agents not to deal with competitors, to which they have just been fined heavily. The CEO exclaimed regret at this, and said "if we could turn back the clock we would".
This information was released in a recent interview in Johannesburg among the bad publicity SAA has been recently receiving. Part of the restructuring also includes dismissing up to 200 management employees and reducing the remaining management's benefits. With this, some staff have been reported to be taking 180days sick leave. The airline cannot afford this, and these staff issues are "on the table" - under review.
SAA has just received numerous awards at the International travel awards in the middle east, claiming "Best Airline website to Africa", "Best Airline to Africa" and numerous others. They have just released a new website to begin the turnaround of the currently money loosing airline.
Costing the airline R500m in losses a year for the 747 operated Johannesburg - London route, SAA bids goodbye to its remaining 5 747's whose leasing prices are currently double those on the market at R1.3bn compared to the usual R660bn for leasing an average 747 anually.
Khaya Ngqula the CEO, announced 2 will depart the fleet by 2008, and the final 3 by 2010. The aircraft to replace them is at the moment unknown to the public.
However, the CEO was open to admit that SAA are "toes" in relation to service compared to their competitors, and the losses are partly from lack of loyal customers on the competitive London route. BA and Virgin now offer far superior services to SAA's ageing 747 product, and Ngqula said he was going to do something about it; to "win back our customers." With a focus to introduce even higher levels than that of the new A340-300/600 products, including improved service effeciency. Training for the staff is also an option in consideration.
This is just part of SAA's major restructuing plan for the next few years. It is similar to that of Air Canada's and Qantas' both of which have been a success. In fact, Khaya Ngqula's confidence in the airline is very good to hear, and he exclaimed even if he did not have goverment backing, he would put "his own money and possessions" into the airline which he believes "has a very optimistic future."
He was challenged about the unfair playing of SAA's recent history in relation to paying travel agents not to deal with competitors, to which they have just been fined heavily. The CEO exclaimed regret at this, and said "if we could turn back the clock we would".
This information was released in a recent interview in Johannesburg among the bad publicity SAA has been recently receiving. Part of the restructuring also includes dismissing up to 200 management employees and reducing the remaining management's benefits. With this, some staff have been reported to be taking 180days sick leave. The airline cannot afford this, and these staff issues are "on the table" - under review.
SAA has just received numerous awards at the International travel awards in the middle east, claiming "Best Airline website to Africa", "Best Airline to Africa" and numerous others. They have just released a new website to begin the turnaround of the currently money loosing airline.
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"Khaya Ngqula the CEO, announced 2 will depart the fleet by 2008, and the final 3 by 2010"
Well, all the B744 will be grounded as from 2007....??
Apparently the grounding schedule will be, Jul 07 x 1, Aug 07 x 1, Sep 07 x 1 and Nov 07 x 2.
Will they be parked (standing) for 1-2 years or will they be sub-leased?
E
Well, all the B744 will be grounded as from 2007....??
Apparently the grounding schedule will be, Jul 07 x 1, Aug 07 x 1, Sep 07 x 1 and Nov 07 x 2.
Will they be parked (standing) for 1-2 years or will they be sub-leased?
E
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Best Airline to Africa.
SAA has just received numerous awards at the International travel awards in the middle east, claiming "Best Airline website to Africa", "Best Airline to Africa" and numerous others. They have just released a new website to begin the turnaround of the currently money loosing airline.
Better than SIA, BA, Virgin to name a few...?
Better than SIA, BA, Virgin to name a few...?