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S.Africa's Cabinet replaces Zuma ally as head of national airline -eNCA
October 18, 2017 / 10:00 PM / 2 months ago

S.Africa's Cabinet replaces Zuma ally as head of national airline -eNCA

JOHANNESBURG, Oct 18 (Reuters) - South Africa’s government has named Johannes Bhekumuzi Magwaza as chairman of loss-making state-owned airline South African Airways (SAA), replacing Dudu Myeni, who was an ally of President Jacob Zuma, eNCA television reported on Wednesday.

The television report gave no reason for the move. Neither the airline nor the South African government could immediately be reached for comment.

Myeni had been reappointed in September 2016 for a year, alongside 11 other board members.

According to the broadcaster, Zuma’s Cabinet approved a new board for the cash-strapped national airline. Five other board members were replaced alongside Myeni.

Magwaza, also known as “JB,” will be joined by Nolitha Fakude as deputy chairperson, Ahmed Bassa, Tinyiko Mhlari, Martin Kingston and Geoff Rothschild.

Credit ratings agencies say SAA should be reformed and cite the cost of propping it up as a threat to South Africa’s credit rating. S&P Global Ratings and Fitch have downgraded South Africa’s credit to “junk” status.

The airline runs one of Africa’s biggest fleets but is losing money. It received emergency state funds in September to help it repay loans of 3 billion rand ($221.14 million) to Citibank.

Magwaza’s appointment comes a day after the Public Investment Corporation (PIC), one of the continent’s largest asset managers, said it has not ruled out investing in SAA.

The PIC manages South African government employee retirement funds and has been in the spotlight recently after media reports that the finance ministry requested money from the pension fund to bail out struggling state firms.

Finance Minister Malusi Gigaba said in September South Africa is not planning to raid the government pension fund to bail out struggling state firms. [nJ8N1LC01M

The opposition Democratic Alliance’s shadow deputy minister of finance, Alf Lees, welcomed the decision on Wednesday, saying Myeni “has done untold damage to SAA and should not have been reappointed to the board.”

“Make no mistake, this reported restructuring of the SAA board and the removal of Myeni is far too little, too late to save the airline. There is no saving SAA,” Lees said in a statement. ($1 = 13.5661 rand) (Reporting by Nqobile Dludla; Editing by Matthew Lewis)

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