Pay up! Former SAA CEO Vuyani Jarana loses R100k airline turnaround bet

It is time to pay up! Back in 2018, South African Airways (SAA) CEO Vuyani Jarana took up the challenge from Free Market Foundation executive director Leon Louw to pay R100 000 to charity if his three-year turnaround plan for the airline does not succeed.

Now, Jarana has to put his money where his mouth is…

Vuyani Jarana to pay R100 000 bet after SAA failure

According to My Broadband, at the time Louw said he was willing to wager R100 000 that by 31 March 2021 – Jarana’s stated timeframe – SAA will not be profitable. The money is to be paid to a charity.

The condition for this wager was that when Jarana pays the charity, it will be from Jarana’s own money and not from public funds.

Jarana was confident that he would succeed and accepted Louw’s bet. At the time, SAA also released a statement saying that the announcement that the airline will unshackle itself from a bout of perpetual losses by the year 2021, is a “realistic assessment of its own strategy which has been reviewed‚ stress-tested and whose implementation is already underway”.

Backing the wrong horse

But, only a year after the bet, in June 2019, Jarana resigned as SAA CEO citing a lack of funding and a decline in government support for his turnaround plan.

“Lack of commitment to fund SAA is systematically undermining the implementation of the strategy, making it increasingly difficult to succeed,” Jarana said in his resignation letter.

Meanwhile, Louw said: “Everyone knows SAA has not become profitable by the end of March 2021 as hoped three years ago when the wager was agreed.”

He did, however, concede that SAA’s failure to turn a profit by the end of March 2021 cannot be attributed to Jarana as he left the company 21 months ago.

A ‘technical knockout’

Now, Jarana has still agreed to honour the bet and support the FMF’s Khaya Lam freehold titling programme.

“Leon wins what I deem a technical knockout in boxing terms because everyone close to SAA at the time could see that the initiatives were showing green shoots of progress towards the turnaround of the company,” Jarana said. “I still believe there is space for an airline of SAA’s profile in the African aviation market. Unfortunately, I could not see through my term hence Leon becomes a lucky winner.”

Update on SAA

As of February 2021, SAA suspended flights once more, dashing hopes its planes will take to the skies any time soon. The airline received a R10.5bn bailout at the beginning of February and it was previously announced it could exit its business rescue process by the end of March. However, it is still looking increasingly improbable that the airline will start operating flights any time soon.

The airline has been under business rescue since December 2019. The lengthy process has drawn much criticism from pundits, but SAA has said that an improved and more efficient national carrier will emerge from business rescue.

“Amongst other benefits, this process aims to produce a right-sized, customer-centric airline designed to be lean, technology savvy, digitally native and agile, to service all market segments,” it said on the FlySAA website.