SAA not unbundling – but has plans to evolve its operating model

South African Airways (SAA) will not be splitting the airline into three different business units but will rather be reconfiguring its internal resources to ensure the airline is more profitable.

Spokesperson for the airline, Tlali Tlali, told Radio 702 that this reconfiguration of resources was expected to “bring more efficiencies and accountability in terms of performance” within the airline.

The announcement came after the CEO of state-owned SAA, Vuyani Jarana, said the airline would be reorganised into three business units as part of a revamp plan that could also involve the partial sale of the airline’s catering unit.

Jarana said SAA would organise itself into domestic, regional and international business units.

However, Tlali later said that no final decision had been made yet and that the CEO’s announcement was to introduce the idea that a template was being designed in “response to the challenges SAA is facing”.

Tlali also said the airline would continue to function as one entity. Any changes would only mean a shift in how internal resources were structured in terms of management and decision making of the airline’s three focus markets – domestic, regional, and international.

Finance minister Tito Mboweni is also expected to announce some form of financial assistance for SAA when he tables his 2019/20 budget in parliament on Wednesday. According to a report by Business Day, the airline is expected to make another large financial loss this year.

The airline’s finances were dealt another blow last week when it was ordered to pay R1.1bn to rival Comair to settle an anti-competition case.