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Johannesburg - At its annual general meeting on Wednesday at its head office in Johannesburg, SA Express announced a tiny profit of R0.7m for its 2013 audited results on a turnover of R2.3bn (14% up), against a background of an operating loss of R25.1m; this discrepancy is not explained in its statement.
"I would like to acknowledge and thank the SA Express team for their continued commitment and hard work. Their tenacity drove initiatives that amounted to a cost saving of R129m, exceeding the target of R70m.
"Though the business is making the right decisions and heading in the right direction, we cannot afford to be complacent as a lot still needs to be done to ensure that we champion a sustainable operational and financial performance," said SA Express CEO Inati Ntshanga.
Importantly, the airline has cleared the disclaimed opinion from previous years (although SA Express adds that it is working hard to improve its audit reports, it does not say what the remaining issues are).
The airline has had trouble getting its accounting right previously, with the entire board being axed in August 2012 after the auditors expressed a disclaimer of opinion on its 2010/11 financials, and questioning the nature of SA Express as a going concern.
In April 2013, SA Express revised its 2011 financials to report a loss of R187m. It had received R539m financial assistance in the previous financial year.
State-owned enterprises are uniquely positioned to set an example for the private sector in aspects of disclosure, transparency and timely reporting.
At the moment it’s the other way around – reporting to the public takes much longer, and is not as detailed as for listed companies, making it much harder to analyse results than for a listed company like Comair.
Comair is required to report on its financials twice a year and provides a lot more detail. On the other side of the spectrum, unlisted companies do not report financials to the public.
But the public needs more information than is reported, as there have been insufficient warning signals over the last few years when airlines have approached bankruptcy.
We have seen Nationwide, Interlink, 1time and Velvet Sky going into liquidation. But the public carried on buying tickets, mostly without sufficient knowledge of the position the company was in (1time being the exception) and leaving consumers who had bought airline tickets in advance out of pocket.
To help avoid this, airlines should ideally be required to report financials quarterly and give a monthly update on their cash flow statements.
If any of the metrics go into a dangerous zone where the probability of liquidation is high, they should be required to give a warning about this at the point of booking.
Going forward, SA Express is working on renewing its fleet as part of its 15-year strategy, planning on a more comprehensive route offering and reduced operational costs.
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
"I would like to acknowledge and thank the SA Express team for their continued commitment and hard work. Their tenacity drove initiatives that amounted to a cost saving of R129m, exceeding the target of R70m.
"Though the business is making the right decisions and heading in the right direction, we cannot afford to be complacent as a lot still needs to be done to ensure that we champion a sustainable operational and financial performance," said SA Express CEO Inati Ntshanga.
Importantly, the airline has cleared the disclaimed opinion from previous years (although SA Express adds that it is working hard to improve its audit reports, it does not say what the remaining issues are).
The airline has had trouble getting its accounting right previously, with the entire board being axed in August 2012 after the auditors expressed a disclaimer of opinion on its 2010/11 financials, and questioning the nature of SA Express as a going concern.
In April 2013, SA Express revised its 2011 financials to report a loss of R187m. It had received R539m financial assistance in the previous financial year.
State-owned enterprises are uniquely positioned to set an example for the private sector in aspects of disclosure, transparency and timely reporting.
At the moment it’s the other way around – reporting to the public takes much longer, and is not as detailed as for listed companies, making it much harder to analyse results than for a listed company like Comair.
Comair is required to report on its financials twice a year and provides a lot more detail. On the other side of the spectrum, unlisted companies do not report financials to the public.
But the public needs more information than is reported, as there have been insufficient warning signals over the last few years when airlines have approached bankruptcy.
We have seen Nationwide, Interlink, 1time and Velvet Sky going into liquidation. But the public carried on buying tickets, mostly without sufficient knowledge of the position the company was in (1time being the exception) and leaving consumers who had bought airline tickets in advance out of pocket.
To help avoid this, airlines should ideally be required to report financials quarterly and give a monthly update on their cash flow statements.
If any of the metrics go into a dangerous zone where the probability of liquidation is high, they should be required to give a warning about this at the point of booking.
Going forward, SA Express is working on renewing its fleet as part of its 15-year strategy, planning on a more comprehensive route offering and reduced operational costs.
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
