The Board of South African Airways (SAA) has accepted the resignation of  its Group Chief Executive Officer, Vuyani Jarana.

In a statement on Sunday, the Board’s Chair, JB Magwaza thanked Jarana for his service to the airline, saying he had contributed to returning confidence and credibility to the state-owned carrier.

Jarana joined the airline late in 2017 and he spearheaded the implementation of the long-term strategy to return the airline to financial and operational sustainability and position it to deliver effectively on its mandate.

He tendered his resignation to the Board over the weekend, citing the lack of progress on a strategy to turn around the loss-making airline as the reason for his decision.

The airline has not made a profit since 2011.

Magwaza says SAA will continue to implement actions to reduce its cost structure and make the airline more competitive domestically and globally.

He says the Board will immediately start the process of searching for a new group CEO to take the SAA’s strategy forward.

Jarana will leave at the end of August.

SOEs trading under insolvent circumstances

Company law experts say struggling state-owned enterprises could find it more difficult to attract experienced executives on fears of trading under insolvent circumstances.

According to company law expert, Professor Tshepo Mongalo, directors of companies that trade under insolvent circumstances could face criminal charges.

“The possibility that government is not coming forth with the funding that is required maybe the main reason why he is concerned that the company is under danger of trading under insolvent circumstances. And until such time that commitment to fund SOEs, particularly SAA can be forth coming then the directors run the risk of trading under insolvent circumstances which will be in contravention of the law leading to criminal allegations against the members of the Board.”

Read SAA full statement below: