JOHN LAMOLA | SAA has not received state support since emerging from business rescue

Over the past two weeks commentators have mounted a strident campaign to malign the SAA brand and the legacy of the airline’s leadership achieved over the past four years. I believe it is prudent to put matters into perspective and correct misconceptions about the airline’s finances and strategic direction.

South African Airways (SOC) Ltd is a company that emerged from business rescue — in effect, bankruptcy — in April 2021 without a single aircraft in the air. Between 2017 and 2020 it could not present annual financial statements for audit because the directors at the time could not provide a going concern assurance. When it was placed in business rescue in December 2019, the company had posted in its last results a net loss of R5.8bn, a negative earnings before interest, taxes, depreciation and amortisation (ebitda) of R2.7bn, and interest-bearing debt of R14.2bn.

The 2024/25 results show a net profit of R115m and zero debt. The resuscitation of SAA from where it was during 2020 to where it is today is an undeniable success story. However, it is essential to contextualise this recovery as an “S-curve” restart — a high-friction, capital-intensive phase where the fixed costs of re-establishing routes and restoring fleet capacity front load the operational pressure.

This has been compounded by global geopolitical headwinds — specifically the Russia-Ukraine and Middle East conflicts — which have driven jet fuel prices to historic highs and caused a global shortage in aircraft availability. These supply chain shocks constrained the fleet strategy required to maintain competitive market share, forcing us to operate through the most challenging phase of an unfinished recovery.

When we took the business over from bankruptcy in September 2021 we did not implement the business rescue plan, as the shareholder preferred a partial privatisation through the Takatso Aviation transaction. A total of R3bn in working capital was to be injected into the business in tranches over three fiscal years.

When the department of public enterprises and/or National Treasury could not meet the dividend obligation to creditors in 2021 and 2022, SAA was instructed to service these liabilities from restructuring funds and airline operations. In the February 2023 budget speech SAA was allocated R1bn. This was not a “bailout” for operational “fuel and sandwiches”. It was the fulfilment of a statutory obligation; the shareholder was in effect reimbursing SAA for the business rescue liabilities the airline had been forced to cover.

I state categorically that since exiting business rescue in 2021 the “new SAA” has been operationally self-sufficient. The note in the 2025 annual financial statements regarding the shares issued to the shareholder was not a ruse or a sneaky concealment of a bailout; it was the correct accounting recognition of the state settling its legacy debts.

The termination of the Takatso transaction left SAA without the R1bn working capital injection the strategic equity partner was intended to provide. To bridge this, we pursued an innovative opportunity born of a superior understanding of aviation infrastructure economics: the strategic liquidation of one pair of unused landing and departure slots at London’s Heathrow Airport.

This was not a “sale of the family silver” or a trick to mask underperformance; it was the strategic conversion of a dormant, under-utilised intangible asset into productive working capital. In global aviation, asset optimisation is a legitimate and common business strategy used by major carriers to align assets with network priorities.

There is no concealment of our financial position. In the latest published annual financial statements the operating loss before depreciation, amortisation and profit/loss on disposal of assets is clearly stated as R317m. Using ebitda in isolation to judge an airline’s success during a reconstruction phase is analytically unsound and inconsistent with industry practice.

I must draw a critical distinction: the integrated report, which critics have scrutinised for typographical errors, is a narrative marketing document, not an audited record of the company’s financial position. While the clerical errors in that report are unfortunate, it is dangerous to conflate them with the professional integrity of the board.

The audited financial statements signed off by the auditor-general of South Africa are the only legal record of truth. The auditor-general found no such discrepancies in the audited figures, proving the financial “engine” of the company is sound, even if the narrative brochure contained regrettable errors.

Desperate to sketch a picture of a crisis, the departure of the CFO in March, and my own resignation, have been thrown into the mix to suggest a rudderless ship. Lindsay Olitzki reached SAA’s mandatory retirement age in October 2025; she was not fired. I have resigned for personal reasons after months of contemplation. These are not signs of a collapse, but a natural evolution of leadership following the completion of the stabilisation phase.

I believe I have played my part in resuscitating the national carrier after business rescue, Covid and the Ukraine war. It is time for new and steady hands to take the airline to the next level. Business rescue restored solvency and enabled a restart, but this has not been accompanied by the full post-rescue recapitalisation and working capital restoration. As a result, the airline has restored commercial relevance but is not yet on the sustainable earnings footing required for a stronger standalone position. Ardent work towards this strategic goal is under way.

I am confident that the faith of the current leadership and staff of SAA in the potential of this company will not be shaken by the noise of naysayers.

• Prof Lamola is outgoing group CEO of SAA. He writes in his personal capacity.