The golfer that SAA sponsors played at a tournament organised by the wife of the airline’s CEO.
Airline’s ‘painful’ cost-cutting didn’t hurt fat deal with Angel Cabrera.
SAA’s boss signed a 3-million endorsement deal with an international golfer just four months after the cash-strapped airline presented “painful” cost- cutting measures to its board.
In a contract signed in London in August 2007, the airline offered Argentinian golfer Angel Cabrera a three-year deal — for what amounts to R28-million at today’s exchange rate — to take part in SAA’s advertising and promotional programmes until 2010.
The move came at a time when the embattled airline was implementing the major cost- cutting recommendations of an airline turnaround specialist.
The Cabrera contract, which bears the signatures of SAA chief executive Khaya Ngqula and Cabrera’s agent, Manuel Tagle, involved SAA forking out:
- A 200000 “bonus” to the golfer to be paid out annually by December 15;
- Ten business-class or first- class return tickets a year; and
- Two first-class tickets for the golfer to fly to South Africa to take part in the SAA South African Open Golf tournament — which the airline sponsored at the time — plus expenses for his meals and hotel accommodation.
According to the contract, Cabrera — who is ranked 55th in the world — would receive his first payment, 20% of the 3- million, by no later than the end of the first week of September 2007, followed by another 30% in April last year and a further 25% by about April this year.
The last payment, 25% of the 3-million, is to be paid into Cabrera’s US bank account early next year.
The contract commits Cabrera to wearing SAA’s logo on his shirt at all golfing events. It also obliged him to take part in the SAA South African Golf Open in 2007, and to use SAA’s logo on his website. ( http://www.angelcabrera.com/ )
In 2007, SAA introduced its fourth cost-cutting programme in just 10 years, aimed at saving R2.7-billion in about 18 months.
The measures, recommended by international firm Seabury Airline Planning Group, included eliminating R60-million by limiting the number of attendants on flights, saving R144- million by restructuring staff — and saving another R287-million by reviewing sponsorship and marketing expenses.
Yesterday SAA spokes man Robyn Chalmers confirmed that Cabrera was on the airline’s books, along with “several other golfers”.
“(He) is a brand ambassador for SAA. He will, for example, assist to promote awareness of and familiarity with SAA’s brand in Argentina when the airline launches a route to Buenos Aires in April this year,” she said.
Last month, Cabrera was among the local and international golfers who played in the Africa Open Golf Challenge in East London.
Ngqula’s wife, Mbali Gasa, owns the rights to the tournament, which was sponsored last year by insurance tycoon Vusi Sithole. Last week the Sunday Times revealed that the businessman co-owns the local arm of an international consortium that has been identified as the preferred bidder for SAA’s in-flight catering contract, estimated by SAA to be worth R1.5-billion.
SAA has a partnership agreement with the Sunshine Tour, of which the Africa Open is a part — but the agreement specifically excludes Gasa’s tournament. The tour’s chief operating officer, Grant Wilson, said this was because the organisation was “sensitive to the fact that Mbali Gasa was involved” and another airline, Emirates Air, had concluded an exclusive sponsorship agreement for that event.
Chalmers this week declined to answer questions related to a possible conflict of interest in the catering deal, saying processes had not been finalised and it would be “premature to provide a view on the matter”.
Additional queries posed to Chalmers late yesterday about Cabrera’s participation in the Africa Open were not answered because of time constraints. Ngqula’s attorney, Billy Gundelfinger, who had not seen the queries, later gave an undertaking to respond personally on his client’s behalf this week.
Last week the Sunday Times reported that the government had launched an investigation into the airline and its chief executive after receiving a litany of complaints from the SA Transport and Allied Workers’ Union.
On Monday, Department of Public Enterprises spokesman Mzimasi Ngqelu said: “The allegations raised by Satawu had been brought to the attention of the chairman of the SAA board ... As the shareholder, we await the urgent response from the board on how they propose to deal with the investigation. We will work with the board to ensure that the issues raised are ... independently investigated.”
Related links
Sponsorship agreement between SAA and Angel Cabrera
Why we won’t say sorry to SAA
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