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SAA's 2% for black business - most of its buying budget goes to whites

By Mpho Sibanyoni | 2016-10-31 13:23:10.0

The wheels of transformation have fallen off at cash-strapped South African Airways following revelations the parastatal spends only 2% of its procurement budget on black-owned companies.

This was revealed by lobby group Transformation RSA leader Adil Nchabeleng on Friday.

Nchabeleng said Transformation RSA's analysis showed the airline spends more than R40-billion per annum on procurement.

Of that figure, SAA only spends R80-million a year buying goods and services from black-owned companies while the remaining R39.2-billion goes to white-owned businesses.

SAA chairwoman Dudu Myeni said: "Transformation does concern the board, but our priority is to turn the airline around.

"We will continue to buy goods and services, but we need to find smart ways to ensure that we move from 2% of the procurement spend on historically disadvantaged groups.

"The board will find smart ways of doing transformation and address skewed procurement at SAA.

"Instead of procuring goods and services from London, let us localise. We have a duty as a board of SAA to advance transformation."

Myeni later told Sowetan she was not proud that only 2% of the procurement budget was spent on black-owned businesses.

Myeni, one of the founders of the Black Business Council, said she has been a lonely voice in SAA pushing for transformation, adding the airline has already hired a transformation manager to address the issue.

She said the parastatal's annual results for the financial year 2014/2015 recorded a loss R5.6-billion and R1.5-billion in 2015/2016.

"The trend of recording losses cannot persist and there was a need to stabilise the liquidity position of the airline by implementing aggressive cost containment strategies, uplifting staff morale and reviewing the route networks," Myeni said.

"All of these areas will be addressed in the long-term turn-around strategy."

The company is currently running without a permanent chief executive and chief financial officer, and Myeni said the appointments should be concluded in the new year.

"The board has initiated the process of appointing a permanent chief executive and chief financial officer, with the aim of making a recommendation to the minister [of Public Enterprises Lynne Brown] early in the new year," said Myeni.