Former South African Airways (SAA) CEO Vuyani Jarana has lost a 2018 bet that his turnaround plan will make the airline profitable in three years.
Free Market Foundation (FMF) president Leon Louw bet Jarana in June 2018 that his three-year turnaround plan will not work.
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 was 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. This was not a profitable decision.
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.
This, however, did not void the wager and the time has now come to pay up.
“Everyone knows SAA has not become profitable by the end of March 2021 as hoped three years ago when the wager was agreed,” Louw said.
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.
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.”