As the turnaround of South African Airways drags on, there seems to be one more loser from this turmoil: former CEO Vuyani Jarana. The former boss reportedly lost a personal bet of R100,000 ($6,800) that SAA would be profitable by 2021. The bet was made in 2018, with Jarana confident that SAA would bounce back in three years. Things didn’t exactly go to plan, to say the least…
According to The South African, backed in 2018, ex-SAA boss Vuyani Jarana placed an R100,000 (now $6,834) wager with Johannesburg-based Free Market Foundation’s executive director that his airline would be profitable by 2021. To avoid the ire of the public and out of confidence, Jarana bet his own money on the airline’s turnaround.
The bet was set to expire on 31st March 2021, and things have certainly changed since then. By the end of March, SAA was far from profitability and much closer to shutting down altogether. This means Jarana will now have to pay up on his fateful bet as soon as demanded.
Jarana has been a good sport about the bet and agreed to pay up, even though he left the carrier in June 2019. He called the loss a “technical knockout” and still thinks SAA has a future in the African aviation market.
So what went wrong? While the first answer might be the pandemic, South African has been struggling for years now. The pandemic simply brought all of its problems to a head, forcing the airline into bankruptcy and leaving its future up in the air.
South African Airways’ future remains bleak. The government has poured R10.5 billion ($717 million) into rescuing SAA and returning it to the skies. Of this amount, the airline has already received R7.8bn ($532mn) to go forward with the administration plans.
Despite pouring more money into the airline, there has been little progress, with the rescue practitioners failing to even update Parliament on the status of the airline. This led to strong criticism from Parliament, which called the rescue officials of having a bad attitude and not sticking to deadlines. The process has been bumpy and delayed repeatedly.
While the airline hoped to leave administration by March, this has been pushed back to at least July. This means the airline will not return to the skies anytime soon, forcing employees to take action.
Last week, the SAA Pilots Association (SAAPA) voted overwhelmingly to go on strike, with 98% wanting to strike. Pilots have been locked out of the airline since mid-December and talks with the rescue committee for new employment contracts have stalled. Considering pilots are needed to transport vaccines, they need adequate flight training, something which has not happened recently.
Tough few months ahead
For South Africa, the coming months pose a significant challenge. The country is reeling from travel bans due to a new variant of COVID-19, which could potentially hamper vaccine effectiveness. While cases have dropped significantly in the last two months, the country’s vaccination efforts are still struggling.
The future of SAA remains up in the air for now, with the late summer being the optimistic projection for the airline to return to the skies.
What do you think about SAA’s future? Let us know in the comments!