SAA’s loss deepens, and the new year has begun badly
South African Airways (SAA) continued on its loss-making trajectory in 2016-17, notching up an unaudited loss of R1.9bn for the year to end-March, information provided to Parliament’s standing committee on finance has revealed.
The loss in the previous year was R1.5bn.
The losses have continued into the current year, with a R734m loss suffered in the first month of 2017-18 on revenue of R4.7bn.
The airline, which is facing liquidity challenges, continues to rely on the R19bn state guarantee to keep its operations in the air.
The airline’s written presentation to the committee showed that it generated revenue of R30.4bn in 2016-17 while operating costs amounted to R30.9bn. Finance costs totalled R835m and the operating loss was R533m.
SAA chairperson Dudu Myeni and her team appeared before the committee on Tuesday morning to report on the performance of the struggling airline and its future strategic plans.
But MPs across the political spectrum were not satisfied with the non-appearance of board members at the meeting, which they said was critical so that the struggling airline could account to Parliament.
The absence of Deputy Finance Minister Sfiso Buthelezi was also noted with displeasure.
Myeni said an invitation to attend the meeting had been issued to all board members.
SAA’s future strategy will address high loss-making routes; improved aircraft utilisation; enhanced labour productivity; and the renegotiation of aircraft lease agreements.
Revenue is expected to be enhanced by R13.6bn over the next five years as a result of several initiatives, while costs are expected to be cut by R10bn.
Included in the plan is a drive to strengthen the balance sheet including through a recapitalisation by the state.
Finance Minister Malusi Gigaba has already committed government to this equity injection.