South African Airways’ (SAA) financial statements for the 2024/25 financial year may look good on paper, but there are unmistakable warning signs indicating that the Airline still faces bankruptcy.
While the financials currently paint a positive picture, there is reason to believe this may be short-lived, as the Airline recently sold its take-off and landing slots at Heathrow Airport to improve its cash flow.
The Minister of Transport, Ms Barbara Creecy, confirmed it during a meeting of Parliament’s Portfolio Committee on Transport last week.
This transaction resulted in SAA’s books reflecting a total revenue of R9,3 million, operating costs of R9,6 million, and cargo and mail revenue amounting to R372 million.
So, the Airline’s total assets exceed its liabilities, but the writing is on the wall.
According to a report by the Auditor-General (AG) on the 2024/25 financial year, which was tabled to the Committee this week, SAA’s liabilities increased from R6,3 billion to R9,4 billion, while its assets grew from R12,8 billion to R16,1 billion.
When the Freedom Front Plus (VF Plus) asked the AG whether this position could be regarded as sustainable and financially sound in terms of the Airline’s future, the reply was that, from an operational perspective, it is not.
The Freedom Front Plus also sought clarity from SAA on the extent of its debtors’ book. The Airline indicated that it is owed between R1,5 billion and R1,7 billion, while it owes creditors between R800 million and R900 million.
The Airline boasted that it has no outstanding long-term loans or other forms of debt, as these were fully settled in 2024 using funds secured through the business rescue process.
Meanwhile, it remains unclear what SAA is paying SunExpress for routinely using aircraft from its fleet.
Had SAA not received a financial lifeline and sold its Heathrow slots, its financial position would not appear nearly as favourable.
There are clearly still serious problems, including failed audits, inadequate financial record-keeping, unauthorised expenditure and a lack of consequence management.
A properly resourced and functional internal audit unit is needed to obtain an accurate picture of the Airline’s financial position.
The time has come for taxpayers to be permanently relieved of the SAA burden through selling it. Government will not succeed in resolving the Airline’s financial distress without providing ongoing support.
Privatisation is the only viable solution to rid the fiscus of this costly, failing entity, which hangs like an albatross around taxpayers’ necks.
FF+ Manifesto on Family values: Promoting traditional family values.
Chasm Face
Fun South African Fact: Some countries have deserts; some have subtropical forests, right? South Africa has: deserts, wetlands, grasslands, bush, subtropical forests, mountains and escarpments.
freeway
Aikona – not on your life [eye-koh-na] or [hi-koh-na] A Zulu term used to express shock or disbelief when talking to friends or family.Example: “Aikona, why did she do that?!” / “Haikona, when?! How?!”