The board of directors of South African Airways on Sunday announced that it has accepted the resignation of chief executive Vuyani Jarana. The CEO of the troubled airline submitted his resignation letter to the board on May 29. In the letter, Jarana expressed his frustration with the bureaucracy and funding shortfalls that created impediments to the fulfillment of his turnaround strategy.

SAA remains the largest loss-making airline in Africa, weighed down by mountains of debt. When Jarana joined as chief executive officer in November 2017, he outlined a recovery strategy that called for a break-even year in 2021 and an eventual return to profitability.  

In the resignation letter, Jarana recalled his preconditions of employment, including a demand that SAA would remain under the National Treasury. Other conditions included a promise by the board that it would not unreasonably withhold key decisions for the implementation of the turnaround strategy and not change its composition by more than 30 percent during the first three years of its execution.

While the board has not met any of Jarana’s demands, lack of funding has exacerbated the situation. Jarana indicated at the time he joined the airline that 9.2 billion rand ($629 million) of debt would mature on November 28, 2017. The approved corporate plan provided for funding of 21.7 billion rand, 9.2 billion of which consisted of the old debt and 12.5 billion for working capital requirements until 2021.

The plan called for the shareholder (the government of South Africa) to provide funding to support Jarana’s objectives. “From 2018 to date we had no less than three incidents in which the company was almost unable to pay salaries due to lack of funding,” he said.  

Although the government injected 5 billion rand during the 2018-2019 financial year, a big part of that went to fund creditors up to the end of March 2018. “We have not been able to obtain any further funding commitment from the government, making it very difficult to focus on the execution of the strategy. I spend most of my time dealing with liquidity and solvency issues,” he said, adding that lack of a commitment to fund SAA systematically undermined his strategy.

Jarana’s resignation takes effect on August 31.

“On behalf of the board, I would like to thank Mr. Jarana for his service and commitment to the airline, said SAA chairman JB Magwaza in a written statement. “He contributed to returning confidence and credibility to the airline. We wish him well in his future endeavors.”

Magwaza said the airline would continue to implement actions to reduce SAA’s cost structure and make the airline more competitive domestically and globally.

 “In terms of his contractual obligations, Mr. Jarana has committed to remain until the end of August to ensure an orderly transition of his responsibilities, which is a matter that the board will consider,” added Magwaza. “The board of SAA will immediately commence the process of searching for a new group CEO to take the strategy forward.”