SAA to break even by 2021

SAA expects to break even in 2021, according to the airline’s interim chief financial officer, Phumeza Nhantsi.

The new board of SAA spent hours meeting with the minister of finance and his deputy on Friday at the airline’s annual general meeting, before giving a media conference, which was several hours late.

Asked about the scale of funding SAA needs, deputy chair Tryphosa Ramano said that the R10 billion in negative equity on the airline’s balance sheet was “what guides you to be sustainable”.

SAA’s long-delayed financial statements for 2014/15 and 2015/16 were adopted at the meeting. It had previously been disclosed in Parliament that the losses in the two financial years were R5.6 billion and R1.5 billion, respectively.

According to Nhantsi, the losses are continuing in the current financial year, with SAA’s foreign currency exposure being a particularly large concern.

“About 60% of our costs are in foreign hard currency, but only 40% of our revenue is also in hard currency,” she said, indicating that the rand’s depreciation this year had hurt SAA.

Dudu Myeni, the recently reappointed chair of SAA, told journalists that her board recognised the need to “stabilise the liquidity position”, implement aggressive cost containment and review routes.

They had received “some marching orders” from their shareholder, Treasury.

No concrete details were, however, revealed, apart from a commitment to “accelerate the turnaround” and “develop a short-term action plan”. The board would meet in December to review the airline’s strategy, she said.

Only then would it talk about the potential of a merger with other state airlines or the introduction of a private shareholder, she said.

Myeni said SAA’s board had prepared its financial statements by the end of last month, which was on time, however, they could not be signed off because the board was waiting for Treasury to approve a guarantee on which the company’s auditors could classify it as a going concern.