SAA Returns To Profitability After Over A Decade of Consistently Consistent Losses
3 min read
Mr Derek Andre Hanekom, the interim Chairman of South Africa Airways
The troubled South Africa Airways (SAA) is wriggling out of indebtedness, insolvency and the threat of business collapse, but it’s now flying into solvency and profitability as indicated in its latest financial record of the 2022/2023 flight operations which closed with a total revenue of $350.8 million USD, (R5.7 billion), which amounted to 183% increase from the previous year.
According to the SAA interim Chief Executive Officer, CEO, Professor John Lamola, when presenting the report of the fiscal year of 2022/2023 at the Annual General Meeting, AGM, held at the airline’s base in Tambo International Airport, Johannesburg, the fiscal year witnessed the final liquidation of the much-touted legacy debt thus, leaving SAA without interest-bearing debt.
Professor Lamola further told his excited guests which included representatives of shareholders, interim chairman of the board and Transport Minister Barbara Creecy, that the airline in the 2022/2023 operating year also achieved positive Earnings Before Interest, Taxes, Depreciation, and Amortization, EBITDA, of $13.97 million (R227 million), a turnaround from the previous year’s negative EBITDA of $60.15 million (R1 billion).
Lamola said the performance was remarkable, moreover coming in the first fiscal period of commercial operations since SAA exited business rescue and restarted operations in September 2021.
He noted that the 2022/2023 fiscal year was the “first time that SAA has seen a positive bottom line since 2012”, and added that the feat was achieved with only six to eight aircraft and nine routes.
Lamola also said that SAA and its subsidiaries, Air Chefs and SAA Technical, “have also steadily grown in staff size, from 800 to the current 2,000, which includes 140 pilots”.
According to him, SAA is looking to consolidate its current route network and fleet strategy. The airline is expected to take delivery of more leased aircraft during the 2025/26 financial year.
Lamola summed up SAA’s impressive performance thus.
“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”.
However, because of an appreciable shortfall in the airline’s operating capital due to the botched negotiation with the Takatso Consortium that would have seen the private company take a 51% stake in SAA, the void is still a challenge that cannot be wished away.
Hence the Transport Minister, Barbara Creecy, said that the government is still open to signing a private equity partner, which would allow the airline to continue opening new regional and international routes.
While the interim board chairman, Derek Hanekom, felt differently. He was disposed to converting few of the assets SAA has in form of slots, three at Heathrow airport, be sold to raise capital crucial for the airline to continue to climb and sooner than later begin to cruise.
Derek Hanekom enthused, “The possible disposal of one of the landing slots would obviously be a useful capital injection in the enterprise”
The valuation of SAA’s Heathrow slots remains to be determined, but other air carriers have shown interest in buying the slot, said Derek Hanekom, SAA interim board chair.
“Even when we were flying, when we had many routes and many flights to London, we were only using one of these landing slots,” said Hanekom.
“The possible disposal of one of the landing slots would be a useful capital injection in the enterprise
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