South African Airways' future hinges on a new strategic plan and CEO

South African Airlines will spell out its future in a strategic plan to be presented to the South African Government in early Apr-2013. But history suggests that implementation of a new strategy is far from assured at the carrier which suffers from extensive government meddling.

A new CEO is also expected to be appointed by the end of Mar-2013, replacing Siza Mzimela who resigned, along with several top executives in Oct-2012 in the wake of a mass board resignation the previous month, citing a "breakdown in the relationship with the shareholder", testifying to the deep divisions between management.

Details are emerging of what led to those events, with media reports suggesting a decision by Minister of Public Enterprises, Malusi Gigaba, to block a ZAR10 billion (USD1.08 billion) decision to purchase a fleet of A350 aircraft to replace the carrier's A340-600s was at the centre of the falling out between the board and management.

Meanwhile SAA survives on the basis of a ZAR5 billion (USD540 million) government guarantee granted on 02-Oct-2012 for a two year period effective 01-Sep-2012. The guarantee is intended to enable SAA to borrow on the financial markets and remain solvent.