SAA: No More Creecy Secrecy

Statement by Dr Chris Hunsinger MP – DA Spokesperson on Transport:

The DA is deeply concerned by the state of governance at South African Airways, exposed by the Auditor-General report to Parliament. SAA received R38 billion from the fiscus between 2018 and 2024 – we cannot throw more good money after bad.

We have written to the Minister of Transport, Barbara Creecy, to demand the immediate appointment of an independent forensic audit of its financials, and a full explanation for the resignation of its CEO, Dr John Lamola, and several board members.

Both SAA and SAA Technical have once again received disclaimed audits with findings, for the sixth successive year. This means that they yet again failed to provide sufficient evidence to back up their financial statements, and that the state of record keeping is so poor that the AG is unable to even determine how significantly misstated SAA’s finances are.

SAA’s systems to detect irregular expenditure and losses from criminal conduct are inadequate – so we don’t even know the scale of the problem. Investigations and cases pertaining to financial misconduct went unreported.

Alone, these would be concerning enough. However, SAA is also misleading the general public about the state of its finances. It claims to be profitable, but its operations lost R472 million last year.

Only the sale of its slot at London Heathrow kept it “profitable” – without this sale, the entity would have lost roughly a billion rand. Funding operating losses by selling assets is not a long-term strategy, it is a bailout by subterfuge. When SAA runs out of assets to sell, these hidden bailouts will become actual bailouts.

Significant doubts exist over whether SAA can even remain a going concern this year. It is losing money on its operations and has few assets left to sell. This means that, without a serious course correction, SAA will need yet another bailout from the state. This public money would be going into an entity where the CFO and CEO have both resigned within the past month, and with a track record of wasting, losing, and mismanaging money.

Only a fully independent forensic review of SAA’s finances and governance, with extensive powers to investigate, can steady the entity now. In addition, the Minister cannot continue to remain silent on the resignations of the former CEO and board members.

SAA has received R133 billion of the public’s money since 2000. The DA will oppose any further money being thrown down the drain through bailouts, whether these are disguised as asset sales or otherwise.