Opinion

“SAA is an Airline that doesn’t Own Aeroplanes” – Sold & Leased Back by Coleman Andrews

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The board of South African Airways (SAA) appeared before Parliament’s watchdog on public spending, the Standing Committee on Public Accounts (SCOPA) on Wednesday and one of the most shocking disclosures was that this airline didn’t own aeroplanes.

SCOPA chairperson Themba Godi kept shaking his head and rubbing his eyes in shock and disbelief that out of a fleet of about sixty aeroplanes, SAA only owned about nine – the rest of the planes it uses are leased from people to whom they were sold some years ago. As a result of the decision to strip the national carrier of its assets, it pays R3.5bn per annum in leasing costs paid in dollars to companies around the globe, “some in Australia and Ireland”, Chairperson of SAA Dudu Myeni explained.

“I’m trying to reflect as you speak….how did we end up with this situation” Godi kept asking.

In what Khaya Sithole describes as a reckless moment in former Thabo Mbeki’s presidency, he (Mbeki) appointed Saki Macozoma to head Transnet and SAA. “Then Saki – at this stage having installed himself as the chairman of SAA replacing Mafika Mkhwanazi (who then went off to chair Transnet after Macozoma’s departure) decides that Coleman Andrews really deserves to own SAA and offers him a few million shares in SAA without informing the Cabinet (apparently he forgot)”.

Here’s the rest of the saga in Khaya Sithole’s account which he wrote late last year

Word has it that this morning Dudu Myeni wrote an 8-page letter to the DA explaining why she does not need to resign as the Chairperson of SAA.
Coincidentally it was precisely 2 years ago when I wrote about the SAA issue. It appears that #StateCapture has BEEN on my mind…

Here’s what I wrote 2 years ago…

One of the privileges extended to Senate Members is the ability to select any random person you like and recommend them for an honorary doctorate. One Senate I know of was given 2 names for consideration in 2013. The names of the recommended persons of distinction – a certain Duduzile Myeni and – wait for it – Ellen Tshabalala (who probably should have been recommended for an undergraduate degree for a start)…

These days Miss Myeni seems to be embarking on a trail of fiscal management at SAA that was initiated by Thabo Mbeki who was once reckless enough to appoint Saki Macozoma as the man in charge of Transnet and SAA. Macozoma – who now finds ample time to lecture us on how the rest of us are clueless about public finances, then seemingly stumbled upon a copy of the Harvard Crimson (the campus leaflet at Harvard University) and read about a cabal of white boys who were about to run Wall Street. This boys club was referred to as Bain Capital and run by a certain Mitt Romney. One of the members of the club – Coleman Andrews – had consulted for airlines in the US and Macozoma worked out that he would be the man to fix SAA.

At that stage, SAA was losing R500 million annually (don’t be surprised, the National Party had a dire record in running airlines). One of the problems is that Coleman Andrews read a newspaper report about crime in South Africa and developed a fear for getting mugged – so Macozoma found a couple of millions to help him live through his fear. And then Andrews expressed that he was more comfortable being paid in dollars – and Saki agreed. And since he will fix the airline – he demands a 2-bonus structure made up of US $1.25 million annually if he hangs out at SAA and an additional bonus based on SAA’s profitability. And Saki agrees.

Then Saki – at this stage having installed himself as the chairman of SAA replacing Mafika Mkhwanazi (who then went off to chair Transnet after Macozoma’s departure) decides that Coleman Andrews really deserves to own SAA and offers him a few million shares in SAA without informing the Cabinet (apparently he forgot). So Coleman eventually agrees to move to SA. But he doesn’t know any estate agents – so Saki approves the acquisition of a 6-bedroom mansion in Bryanston for Coleman – paid for by the state.
Upon arrival, Andrews commissions his own firm – Bain – to help him figure out how to fix SAA. The job is split between Bain and McKinsey and 9 months later – they find a solution. The final bill for the consulting services was R224 million – and Bain got R208.9 million.

Armed with a genius solution – Andrews does exactly what the consultants advised him to do – sell a couple of aeroplanes and suddenly we have a R350 million profit. Andrews gets his bonus and then a certain Jeff Radebe (in a rare display of spirited corporate governance) decides SAA can do better than Andrews – and engineers his exit. When all of this was done – Coleman Andrews received R232 million from SAA – and the greatest scandal of them all – he didn’t have to pay tax – as Saki had negotiated for SAA to take care of that minor problem.

So before you judge Miss Myeni – know your history. #SAA#StateCaptureHistory

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11 Comments

  1. I’m particularly troubled by the fact that FNB CEO promises to boycott SAA and our Finance Minister goes running after him.

    The explanation given by his spokesman for this apologetic act is that FNB has a huge number of employees that uses FNB hence SAA needs them more than anything.

    How about reminding FNB CEO that the fact that he can afford to ride a plane is because Government Banks Billions of Rands with his Bank?

    I am personally getting worried with Malusi’s foot dragging in corruption at the Treasury and his apologetic stance towards Business even though Business has shown him how they don’t take him seriously.

    1. You must remember to give us context to some of these stories Kobedi. I dont read newspapers so never know most of of what is in them.

  2. SAA rot expose what does it mean.

    Sadly it only mean we need to wake up and cap the leakage, with a hope of turning the situation around, to bring the airline to sustainable position which will take several years to achieve., taking into consideration that we are already in debt of approx R10 billion.

    Why several years? This will only be achievable once we are able to buy our own fleet, of which we do not have money to .

    These a340-600 air buses cost and average of r 3,5 billion each.

    Can we recover the monies identified as irregularities ?

    No! Not even a cent thereof, as all these payments were authorized at highest level.

    Can the expenditure be reduce “yes” on the areas already identified by the expose.

    Will this make the airline a viable and self-sustaining national asset ?

    This will depend on the commitment of the new collective leadership, and government`s close monitoring and evaluation process.

  3. Now this articles really excites me coz earlier today I saw a tweet by the rubbish devil called Mail and Guardian “Carefully” detailing SAA bailouts since when……..Guess…..Tholukuthi 2008. So according to them fools like me should believe that SAA problems started in 2008 during Zuma times.

  4. wow..silence from the rowdy crowd..it was really shocking listening to Myeni relating to what happened and what is still happening at SAA…the main stream media instead of trying to dig deeper to find out what’s happening nooo!! they are busy now pushing the angle of Telkom and taking a dig at Malusi…why Prince Pravin is not called to appear before SCOPA,,he was trying to bring Bain back to consult at SAA….

    1. He might be asked to appear before the Treasury appearance. I had asked the Honourable Mr Godi to ask him and Mcebisi Jonas to appear to explain the mismanagement of money and wasteful expenditure there. So let’s hope it happens

    2. so if Dudu Myeni and company found the main problem at SAA , why doesn’t she fix it with the bailouts from government? Saki and Jeff are still around, why don’t they answer to scopa? How many years has the chairman been in the position and didn’t know about Coleman selling all the planes? Is SAA still up to now paying Coleman? Compare SAA to Telkom, a few years ago Telkom was a mess but five years later with a good chairman, they found the solution to their problem and now they are even going to help SAA from their profits from sale of government share. If you see a problem and still continue on the same path and not change course, you are in the same boat as the other. Ms Myeni has been in the position where she could change course of the airline but she was continuing in the same Coleman course when she also wanted to get the Guptas to buy the planes from Airbus and lease them to SAA. Remember that story?

      1. Don, can I ask you to please look through UnCensored files for SAA corruption stories? You will get another side of the story and we can talk.

        Kindest

        Pinky Khoabane

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