SAA losses mount for 2017
27 Mar 2018 - by
National carrier South African Airways made a further financial loss of R3.7 billion over the nine months to the end of 2017, as revenue dipped about R1 billion below its forecasts for that period.
The figures were tabled in a briefing by SAA CEO Vuyani Jarana, chairman JB Magwaza, and executives to Parliament's standing committee on finance. They predicted that the airline would stage a return to profitability in four years’ time as its turnaround strategy started to bear fruit.
But for the current financial year the company is expected to show a loss of just less than R5 billion. It is expected to table these results in April after holding its annual general meeting on Thursday.
SAA saw a decline in passenger numbers in the period under review and dropped fares in response to increased competition. At the same time running costs rose, largely as a result of steeper fuel costs.
The airline has been a burden to the national purse for years, with then finance minister Malusi Gigaba dipping into the National Revenue Fund in September last year to give it a bailout of R3 billion to prevent it from defaulting on its debt obligations to Citibank. This followed a R2.2 billion bailout in June to enable it to cover its repayments to Standard Chartered.
Gigaba in February, shortly before he was moved to the home affairs portfolio in a Cabinet reshuffle, said government remained committed to plans to recapitalise SAA to the tune of R13 billion.
The airline late last year, after Jarana took over, negotiated the refinancing of R6 billion in debt to local lenders.