Reference no: EM132655039

Sizwe Lane Airlines Limited (SLA Ltd) is a medium to large size Aviation
Company, established in 1982 in South Africa and listed on the Johannesburg Stock Exchange (JSE). The airline prides itself as one of the well-established airlines in South Africa with 4000 (2019: 3090) employees spread across the major cities.

Ms Jane Khumalo, the Chief Executive Officer (CEO), has vast experience in the aviation industry. With her vast experience made her acquaintance with a Dubai Airline, which enables her to engage with its management to assist SLA Ltd strategically to reinforce presence within the African continent, including additional flight destinations across the Middle East and European countries. These new flight routes commenced at the beginning of January 2020 as a new revenue stream line project, and staff resources were sourced mainly from the Sizwe Lane Airlines Academy (SLA Academy).

SLA Academy

• SLA Academy centres are located in four major cities within South Africa i.e. Gauteng (Lanseria); Western Cape (Somerset West); KwaZulu-Natal (Stanger) and Eastern Cape (Grahamstown).The academy centres recruit students who major in mathematics and science, for work opportunities within the aviation industry. R5 million bursaries are awarded each financial year after an extensive selection criteria process of the students who completed Grade 12, including completing an assessment test. The ratio of students accepted is 2:1, from public and private schools respectively.

• The Academy aims to enrol 10-15 graduates over a three to five-year period, and thereafter SLA Ltd will grant these graduates an internship contract for a period of two to three years. This is aimed to support the company with rare skills and compliment the company's succession plan. Executive management, as part of their key performance indicators, are tasked to mentor these graduates by meeting with them at least once quarterly for the duration of their internship.

• The revenue comprises of flight sales (Airline) and rendering of services. The rendering of services comprises of voyager and aeronautical income. Aeronautical income comprises the majority of airport income which includes airline terminal space rentals, airline landing fees, and usage fees for terminals, gates, services and passenger counts.

Aircraft are allocated based on passenger demand per year and SLA Academy utilises unused aircraft for training purposes. Unused aircraft are aircraft that are not booked for any revenue generating stream for the year or specific period i.e. idle

Newspaper article

The 2020 financial year has been a difficult period for SLA Ltd due to prolonged strikes within the aviation industry and constant delays of flights. The following media report was issued by Mr Jerry Khan the Chief Operations Officer.

• "SLA Ltd regrets to advise all customers that we were served with a notice by the trade union to embark on a strike effective 1 December 2019. The strike would cause maximum disruptions to SLA Ltd's operations and therefore, in an effort to protect our customers and their travel plans, we have taken the decision to cancel all domestic, regional and international flights scheduled between 1 December 2019 and 7 December 2019, with the exception of a few international flights. Customers are requested not to travel to their departure airport unless in possession of a rebooked itinerary. Kindly note we are operating on 'skeleton staff' but should you require assistance please contact us on xxxxxx. Immediately after this announcement was posted on all relevant media platforms, including social media, SLA Ltd's share price dropped by 4,5% and remained as such until the company's reporting date.

Required

Problem 1: Identify five key external risks that may impact SLA Ltd and for each risk indicate:

1. Trigger for the risk factor
2. Description of the risk