SAA needs another R4bn to keep it afloat, but analysts say the government should call its quits on the beleaguered airline.
SAA board member Martin Kingston said on Friday: "We are currently operating at a loss, that is the background to the request that we have made for R4bn of support for the current financial year."
SAA currently has a R3.5bn short-term loan, which will be depleted at the end of this month, and a R9.2bn long-term loan.
Kingston, who was speaking on Friday at a briefing to address concerns among lenders and other stakeholders after CEO Vuyani Jarana resigned, added that: "The long-term strategy is predicated on having adequate working capital support to see us through to when we expect to see profits coming through in 2021/22 as we have indicated consistently throughout the past year."
But he added the SAA board was worried about the economic environment, which will have an impact on the airline's funding.
"I have no doubt that the shareholder [Treasury] is very well aware of the fact that they need to allocate their limited resources responsibly. And in that particular context we need to make a coherent claim to them in respect of the fact that we have a sensible investment case for SAA," Kingston said.
In the commercial world SAA shouldn't be allowed to continue
— Ian Cruickshanks, chief economist at the South African Institute of Race Relations
But Ian Cruickshanks, chief economist at the South African Institute of Race Relations, said: "We keep on saying, 'we are working on it, we are working around it', whatever. I'm sorry, but as far as SAA is concerned it should possibly be barred from operation because in accounting terms it's not a going concern. Its revenue is considerably less than its cost base, so in the commercial world it shouldn't be allowed to continue."
SAA also faces higher fuel costs with the weakening rand. Kingston said: "The volatility in the currency is a big concern for us. Our biggest customer base is our tourists, so the more the rand weakens the more tourists come to SA but the more expensive is our fuel."
Kingston is the chairman of the airline's finance and investment committee.
The state-owned carrier had a dramatic week that started when Jarana's resignation letter was leaked last weekend. This week SAA was so worried about further leaks and bugs in its offices that it held a meeting with Jarana about his resignation at financial advisory firm Rothschild & Co.
Thandeka Mgoduso, chair of the remuneration, human resources and nominations committee, said: "Because we were not certain where the leak had come from, we felt that [we should] move from the premises of SAA to an office space we know is regularly swept, and if there was any untoward behaviour that could be tracked very quickly."
She added the board was investigating the leak, including all board members.
Economist Mike Schussler said that "if people are bugging each other's offices" then the trust between the board and management is lost.
Jarana, who initially said he would serve a three-month notice period, will leave tomorrow.
The airline has appointed Zukisa "Zuks" Ramasia as the acting CEO.
Schussler said: "SAA needs someone who is going to be tough and act on their own without the interference of the ministry and the board because SAA is not going to survive otherwise. They probably won't survive anyway. The point is they are indebted to the nth degree. The end of the line is coming soon. We are in a deep crisis, we cannot save every SOE and I think at this point in time Eskom is much more important than SAA. If we give that [the R4bn] to SAA we will feel the impact of a downgrade."
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