State-owned airline SAA has patted itself on the back after breaking a more than decade-long money-losing streak in the 2023 fiscal year, when it swung into a profit.
It reported a net profit of R252m in the year to end of March 2023, from a loss of R3.65bn a year earlier, and marking the first time it logged a positive bottom line since 2012.
The state-owned company’s return to the black came on the back of a nearly three-fold jump in revenue to R5.7bn, the interim board said during the AGM attended by transport minister Barbara Creecy, the shareholder representative, in Johannesburg this week.
The airline was among state-owned enterprises hollowed out and repurposed to serve the interests of the ruling elite during the height of state capture in SA.
It received R48.3bn in government bailouts from 2017/18 to 2022/23. It was slapped with disclaimed audit opinions by the auditor-general from 2018/19 to 2021/22.
SA was placed in business rescue on December 5 2019, mainly because of operational instabilities, pressure on the fiscus, lack of funding and withdrawal of services by key service providers. It exited the rescue process on April 30 2021.
From 2018 to 2022, irregular expenditure increased from R22bn to R44.5bn, while fruitless and wasteful expenditure increased from R24.8m to R207.3m over the four-year period.
For 2022/23 the airline turned a prior year’s -R1bn earnings before interest, taxes, depreciation, and amortisation (ebitda) “into a positive R277m”, SAA spokesperson Vimla Maistry said.
“This positive 2022/23 performance is particularly notable given the challenging global aviation environment at the time and the then uncertainty around the future of SAA with a strategic equity partner.
“The International Air Transport Association … notes tough economic times for air transport worldwide, with the pressures of post-Covid-19 recovery, persistently high interest rates, the war in Ukraine and the highest oil (and therefore jet fuel) prices impacting airlines’ sustainability,” Maistry said.
SAA operated between six and eight aircraft during the financial year, serving up to nine destinations only.
“These pleasing results of the 2022/23 financial year are emblematic of the hard and careful work that went into the relaunching of SAA as a reliable airline and globally admired brand. This has put SAA on a path to financial sustainability without reliance on the fiscus” said SAA interim CEO John Lamola.
“We have now entered a period of consolidation of the current route network and fleet strategy and are looking to the next phase of quantum growth as SAA renews its fleet to elevate its customer offering, open more intercontinental routes, and pursue its environmental sustainability goals,” Lamola said.
Addressing parliament’s standing committee on public accounts in October, Creecy said: “Since exiting business rescue, SAA has repositioned itself as a leading national carrier taking advantage of its ability to provide long-haul and intercontinental flights services and leveraging its partnerships with other airlines.”
She said that since her appointment, she had begun a number of processes as a shareholder representative “to ensure that the department’s entities are fulfilling their core mandates and able to account for their expenditure”.
These include a process of revising the department’s strategic plans and those of its entities “to ensure they are fit for purpose and align with the priorities of the seventh administration”.
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