SAA is now a `global player in a global market’ and Zukile Nomvete is going to lead the airline into the 21st century, reports Max Gebhardt
ZUKILE NOMVETE is working himself out of a job. If at the end of five years he is still leading the transformation of South African Airways (SAA), he believes he
will have failed – not only himself, but also his staff.
Appointed to his role as Transnet executive director of airways and properties in April, for a five-year period, Nomvete will be responsible for the strategic direction and policy decisions for the airline.
Nomvete is no newcomer to the aviation industry, having started out as a “grease monkey” with Aer Lingus in Ireland, after fleeing South Africa during the 1976 riots. His climb through the ranks of the aviation industry, he feels, will be beneficial not only to SAA, but to himself and his employees as he leads the airline into the next century.
With asset holdings of R14-billion, the parastatal is facing a three-pronged challenge from privatisation, increased competition and the government’s on-going process of transformation of the broader society of South Africa.
“For SAA to survive, it is not just a question of affirmative action, but for the airline to take cognisance of the fact that it is now a global player in a global market.
“The transformation of SAA is about the employees of the company taking responsibility and accountability for their decisions from the lowest level through to management.”
Nomvete says the biggest hurdle he has faced since joining the organisation is the sense of despair among the airline employees – a hangover from the old days of a hierarchical management structure that needs to be changed.
This low morale comes on the heels of increased competition in both the international and domestic sectors of its operations.
“Mistrust about the future, dissatisfaction at our on-board services and an unsatisfactory on-time departure record are some of the factors that have contributed to low morale within the organisation,” believes Nomvete.
“The employees of SAA need to take ownership of the company.”
Nomvete does realise there are fears and concerns about the transformation process. But, in order for the airline to survive and succeed, it is going to have to be continuously innovative and undergo a significant overhaul.
According to Nomvete, the rationale behind the transformation of the airline is so the company can expand its share of the cake. “Then the threat is not really affirmative action, but whether we can expand our market share so everyone can benefit.
“We need to start utilising our resources to optimum advantage. If I were just motivated by profits, half the employees needn’t be here.”
The threat of privatisation and increased competition form part of the front that Nomvete would like to see tackled within the broader transformation of the company.
“We need to be able to offer a competitive and comparative world class service. To achieve this we have to address the service levels and the product we offer.”
On a practical level, Nomvete would like to see a change in the attitude of staff, cabin layout, and increased efficiency. “By March of next financial year, we must, out of necessity, have a completely different airline in how it looks and feels.”
SAA recently hired the services of London- based consultant SBC Warburg in co-operation with two local accounting firms – Kessel Feinstein and NN Gobodo & Company – to guide and assist management with strategic business issues facing the airline.
“This valuation is regarded as an important exercise and the results obtained will serve as key inputs in determining the future strategic direction of the airline,” Nomvete said.
It is an indication of the commitment of management to rise to the challenge of increased competition, both domestic and local.
The issue of the privatisation of SAA, as far as he is concerned, is solely the prerogative of the shareholder – in this case, the government.
“If the shareholder says do it tomorrow, I will duly make my input. Of course there are various task forces looking at the issue. My job is to serve the shareholder.”
As far as placing SAA firmly in the black is concerned, Nomvete believes the airline needs to implement a sound business plan with a vision for the next 20 years.
“This will not involve cost-cutting, rather, cost consciousness,” says Nomvete.
In line with this belief, Nomvete says, the airline will have to focus on its core business – the transport of people.
“We need to work jointly with our neighbours in the sub-region, realising we cannot all afford to have a different fleet mix and equipment. We will have to rationalise, it is ridiculous; nobody will be able to survive,” if the present situation continues.
Nomvete would prefer to see a strategic alliance with the national airlines in Southern Africa, where maybe two or three major hubs, such as Johannesburg, would serve the entire market.
This alliance need not only be within the airline industry, but should extend into the entire tourism sector. Nomvete wants all stakeholders to become involved in the marketing of tourism in the country.
On this route lies the key to SAA’s successful transformation, he believes.
SAA reported an increase in both turnover and profit for the financial year end 1995/96 this week.
Internal and external turnover rose from R3,999-billion in 1994/95 to R5,013-billion in 1995/96. The company saw its net profit after finance costs increase from R217- million to R324-million for the financial year 1995/96.
Leon Els, a representative for SAA, said the increase in the airline’s profits came on the back of an upswing in tourism to South Africa and the influx of rugby spectators for the Rugby World Cup last year.
The airline had also been involved in a cost-cutting exercise that saw the rationalisation of a number of international and domestic routes and the closing of offices.
He said the airline was expecting to post a profit for the financial year 1996/97, but it didn’t believe the upswing would continue.
Els said SAA had been hard hit by the weakening rand, which had resulted in an increase of aircraft landing and fuel costs.
“There has been a downswing in the first quarter of this financial year,” said Els.
On the acquisition of further new aircraft, SAA said it had a “good understanding” with supplier Boeing and purchases would be made if and when required.
Says Nomvete: “Budgetary cutbacks in difficult times are a short-term solution.”