SAA's new R4bn loss forecast is much worse than its turnaround plan projected
Of the R10bn state recapitalisation, R7.6bn would be used to repay loans, but SAA will still have outstanding debt of R9.74bn by April 2018
State-owned national airline South African Airways (SAA) is projecting a loss of R4bn for the financial year to end-March 2018, chief financial officer Phumeza Nhantsi said on Wednesday. This was much worse than the R2.8bn loss projected in the five-year turnaround plan. The loss is mainly due to the costs associated with exiting from leasing five narrow-bodied aircraft. By end-September 2017, the loss for the year to date was R2.1bn, up from the projected R1.8bn. Revenue came in at R14.5bn, lower than the budged R15.4bn. In her briefing to Parliament’s standing committee of finance, Nhantsi said revenue shortfall in the year to end-September was R879m, about R450m of which was from the domestic market where SAA was facing stiff competition from low-cost carriers. Operating costs were in line with the budget while maintenance costs had exceeded the budget by R300m and finance costs — related to the recapitalisation — had been reduced by R141m. An unanticipated amount of R300m had to...
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