During its appearance at Parliament’s Standing Committee on Public Accounts (SCOPA) last week, South African Airways’ external auditors presented their findings on the airline’s financial statements for the past four years, that is from April 2018 to March 2022. Media reports following this SCOPA presentations have largely painted an SAA that is marred by a history of poor management and a persistent uncertain future.
The Auditor-General’s report covers SAA’s financials during the state capture years, and not its current cash positive and post-business rescue conditions.
The management and the Board that has been installed since SAA emerged out of business rescue and started operations late 2021, would disprove any claim that financial position of SAA is currently at a breaking point, and the airline’s sustainability is questionable.
The recent financial year 2022/2023 is still being audited and the formal tabling of the audited financial statements to Parliament, where the details of the structure of this public entity’s financials will be revealed, is yet to take place.
Energized by the appraisal in the findings presented by the Auditor-General to the SAA shareholder representative, Minister Pravin Gordhan at the Annual General Meeting of the company in November 2023, as well as at the SCOPA sitting referred to above, SAA’s current leadership is marshalled to rebuild and reposition the airline as a formidable air services provider in its chosen markets.
Under the insistence of its shareholder representative, the airline has put several controls and policies into place to avoid a repeat of those years, and to ensure scrupulous compliance of the Public Finance Management Act. SAA is in a healthier financial position than it has been in several years. The audited financial results of the year 2022/ 23 will show that the airline has the strongest balance sheet since its last profit declaration in 2011. Since last year, the airline has been running on financial resources generated from its own operations and management innovations.
Even against the historical negative performance of the years reported at SCOPA, the Auditor General could declare that SAA is a going concern, able to pay its liabilities as they became due.
The airline is on an expansion drive, and in the market for more aircraft and is pursuing a plan to add more international routes to its network.
In the past month SAA has added its first intercontinental flight to São Paulo, and an additional regional destination to Abidjan. This week it announced the opening of the Gqeberha route from 13th December 2023. An announcement on the next interoceanic route will be made at the start of the calendar year 2024.
Not only is the airline meticulously expanding its fleet and routes, but it is also attracting jobs that had to be shed during the business rescue restructuring process.
Rigorous planning and due diligence are conducted prior to making major changes to operations, with a view to ensure SAA remains in a stable position for sustainable growth.
The airlines’ expansion programme had a slag in the first six months of the current fiscal year due to the worldwide shortage of aircraft following the Covid pandemic global supply chain constraints that are experienced by aircraft manufacturers. To mitigate this pressure on available seats capacity, we have deployed temporarily unbranded aircraft ahead of the permanent longterm acquisitions that are being pursued. We are thankful that customers have embraced these aircraft and crew that vary from SAA’s acclaimed product.
We are also humbled and thankful for the support we have received from our customers, Voyager members, and suppliers, along with our travel trade partners, who have stoically stood by us. Their continued support remains invaluable to us.
SAA has a medium-term corporate plan that envisages the airline being further strengthened by investment and business transformation from the identified private equity partner, Takatso Aviation. It is planned that until this transaction is concluded, the resized SAA will continue to defend and grow its market share and thrive financially.
Our relationship with our suppliers, trade partners, and customers are vital to us, and we remain committed to talking to you, sharing ideas, and addressing any concerns you may have about SAA’s business continuity prospects.
John Lamola – SAA Interim Chief Executive officer