SAA still in the red but expects to slash losses
Airline tables corporate plan in Parliament detailing how it intends to escape its financial hole
South African Airways’ (SAA’s) high cost structure and heavy debt burden will keep the state-owned airline firmly in the red this financial year. The financially fragile company projects a net loss of R853m in 2017-18 and while this is a significant improvement on the projected loss of R4.5bn for 2016-17, doubt has been expressed about the reliability of what could turn out to be an optimistic forecast. The airline concedes in its corporate plan tabled in Parliament on Monday that it failed to meet its budgeted revenue for the past three years, falling short 12% in 2014-15, 4% in 2015-16 and a projected 9% in 2016-17. According to the corporate plan tabled in Parliament, revenue of R34.4bn is forecast but operating costs of R29.7bn, aircraft lease costs of R2.9bn, finance costs of R1.7bn and depreciation and amortisation of R692m translate into a forecast bottom-line loss of R853m. DA deputy finance spokesman Alf Lees said that while the loss of R853m might seem like an improvement ...
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