SAA has issued a statement by interim CEO, Professor John Lamola, refuting press reports that bring into question the carrier’s sustainability, and claim the airline is “at breaking point”.
During a Parliamentary Standing Committee on Public Accounts (SCOPA) session late in November, SAA’s external auditor presented its findings on the airline’s financial statements for the past four years – ie from April 2018 to March 2022. The airline says that following the SCOPA presentations, media reports have painted an SAA that is marred by a history of poor management and a persistent uncertain future.
The statement from SAA points out that the Auditor-General’s report covers SAA’s financials during the state capture years, and not its current cash positive and post-business rescue situation.
“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 the financial position of SAA is currently at a breaking point, and the airline’s sustainability is questionable,” says the airline.
“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.”
SAA says its current leadership is marshalling 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 in place to avoid a repeat of those years, and to ensure scrupulous compliance with 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.”
Prof Lamola says 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, having added its first intercontinental route, São Paulo just last month. An announcement on the next interoceanic route will be made at the start of the calendar year 2024.
Lamola also notes that SAA’s expansion also attracted jobs back into the airline – jobs that had to be shed during the business rescue restructuring process.
He notes that rigorous planning and due diligence are conducted prior to making major changes to operations, to ensure SAA remains in a stable position for sustainable growth.
Speaking of the ‘damp lease’ agreement with Turkish carrier Sun Express, he added: “The airline’s expansion programme had a lag 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 were experienced by aircraft manufacturers. To mitigate this pressure on available seat capacity, we have deployed temporarily, unbranded aircraft ahead of the permanent long-term acquisitions that are being pursued.
“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.”
The airline says its relationship with suppliers, trade partners, and customers is vital. “We remain committed to talking to you, sharing ideas, and addressing any concerns you may have about SAA’s business continuity prospects,” says the airline.