Publications
Partners
Cape Town - All indications are that South African Airways (SAA) will announce a second huge financial loss in a row on Wednesday at the company's annual results for the 2013 financial year.
The results were meant to have been finalised by September 30 2013, as per legislation for state-owned companies, but ongoing negotiations between SAA and the Treasury about further financial assistance for the airline meant that the date had to be extended to Wednesday.
The state-owned airline is expected to announce a loss somewhere far north of R1bn, following on an operating loss of R1.3bn in the 2012 financial year.
SAA is also, according to some sources with knowledge of the accounts, heading for another loss in the current 2014 financial year.
On long distance routes, the airline is flying aircraft which are old and heavy on fuel. SAA pays for fuel and aircraft costs in dollars, which means the current weak rand/dollar rate is having a massive impact.
SAA makes losses on most of its long-haul flights and loses R300m per year to fly to Beijing.
The airline has been dependent on a government guarantee of R5bn to tide matters over till circumstances improve. SAA has already lent R3.2bn against this guarantee.
The company has started in implementing a long-term turnaround strategy that was tabled in parliament in February 2013. The success of this strategy is however unknown, with many sources claiming that several targets have already been missed .
The only positive news for SAA may be in the peformance of its low-cost carrier Mango, which looks set to make another profit this year.
Follow James Stayn on Twitter: @jamesstyan
The results were meant to have been finalised by September 30 2013, as per legislation for state-owned companies, but ongoing negotiations between SAA and the Treasury about further financial assistance for the airline meant that the date had to be extended to Wednesday.
The state-owned airline is expected to announce a loss somewhere far north of R1bn, following on an operating loss of R1.3bn in the 2012 financial year.
SAA is also, according to some sources with knowledge of the accounts, heading for another loss in the current 2014 financial year.
On long distance routes, the airline is flying aircraft which are old and heavy on fuel. SAA pays for fuel and aircraft costs in dollars, which means the current weak rand/dollar rate is having a massive impact.
SAA makes losses on most of its long-haul flights and loses R300m per year to fly to Beijing.
The airline has been dependent on a government guarantee of R5bn to tide matters over till circumstances improve. SAA has already lent R3.2bn against this guarantee.
The company has started in implementing a long-term turnaround strategy that was tabled in parliament in February 2013. The success of this strategy is however unknown, with many sources claiming that several targets have already been missed .
The only positive news for SAA may be in the peformance of its low-cost carrier Mango, which looks set to make another profit this year.
Follow James Stayn on Twitter: @jamesstyan
