Home » Aviation: How Corruption at South African Airways may have led to its financial and operational struggles

Aviation: How Corruption at South African Airways may have led to its financial and operational struggles

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The national carrier of South Africa, South Africa Airways (SAA) has over the years tried to sustain its operation in the aviation sector with the government frequently injecting bailout funds to the airline due to its financial challenges.
The carrier’s financial struggles in the aviation may not be unconnected with corruption at the highest level of management.
According to simpleflying.com, allegations and accusations of corruption within South African Airways are nothing new. However, as the airline attempts to turn over a new leaf and start anew, its recent history and management have been under close scrutiny with a probe into corruption at the airline. In the most recent development, the investigation has found that a close friend of South Africa’s former president was responsible for a great deal of corruption and mismanagement.
Dudu Myeni in the spotlight
Overseeing an investigation into fraud and corruption relating to South Africa’s state-owned entities and government departments is acting chief justice Raymond Zondo. According to The Daily Maverick, Zondo’s findings indicate corruption at the highest levels of South African Airways, with Dudu Myeni, a close friend of the former South African president under close scrutiny.
Early in the report, it states that there was” a steady decline in the quality and effectiveness of the governance of SAA from 2012 onwards,” and that the poor quality and ineffectiveness of the company developed over the period that Myeni was the Chairperson.
“She proceeded, through a mixture of negligence, incompetence and deliberate corrupt intent, to dismantle governance procedures at SAA, create a climate of fear and intimidation and make a series of operational choices at SAA that saw it decline into a shambolic state.” – Acting Chief Justice Raymond Zondo via The Daily Maverick.
Costing SAA over $50 million
Part one of Zondo’s final report recommends that Myeni be investigated for possible fraud regarding delays in an Airbus A320 sale-and-leaseback (SLB) deal involving Pembroke Capital.
Because of A320 delivery delays, Myeni’s actions cost SAA about R800 million – an amount equivalent to nearly $51 million. The report notes that delays were costing SAA R2 million ($127,000) per month in storage fees to Airbus for not taking delivery on time.
Chief Justice Zondo also noted that those responsible for SAA’s governance were not motivated to act in the airline’s best interest, but rather towards their own personal interests.
Just the beginning
RFI notes that Zondo’s recently-released findings are just the first installment of a three-part investigation. The second volume will be delivered to South Africa’s current president Cyril Ramaphosa at end of January, while the third and final tranche is set to be released at the end of February. With the first volume coming in at 856 pages (including citations), there will undoubtedly be more compelling and condemning information released in the next two months.
RFI adds that President Ramaphosa is now himself facing pressure to ensure that corruption charges are brought against those implicated by Zondo.

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