OPINION | SAA in a healthier financial position than it has been in several years

Contrary to some media reports, SAA has turned the corner.

At its appearance before parliament’s standing committee on public accounts (Scopa) last week, SAA's external auditors presented their findings on the airline’s financial statements for the past four years, from April 2018 to March 2022.

Some media reports emanating from this presentation have largely painted an SAA 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 board that has been in place since SAA emerged out of business rescue and started operations in late 2021 would disprove any claim that the airline’s financial position is currently at a breaking point, and its sustainability is questionable.

Statements for the financial year 2022/2023 are 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.

Energised by the appraisal in the findings presented by the auditor-general to the SAA shareholder representative, minister Pravin Gordhan, at the AGM of the company in November, and the Scopa sitting, SAA’s 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 with the Public Finance Management Act.

SAA is in a healthier financial position than it has been in several years.

The audited financial results for 2022/23 will show 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 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 December 13. An announcement on the next interoceanic route will be made at the start of 2024.

Not only is the airline expanding its fleet and routes, but it is also reintroducing jobs that had to be shed during the business rescue restructuring process.

Rigorous planning and due diligence are conducted before making major changes to operations, with a view to ensure SAA remains in a stable position for sustainable growth.

The airline's expansion programme hit a snag in the first six months of this fiscal year due to the worldwide shortage of aircraft after the Covid-19 pandemic global supply chain constraints 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. 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 is 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.

• Lamola is the interim CEO of SAA.

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