SAA’s projected loss over the last year is R5.2bn

SAA’S financial bleeding continues with the airline expected to post R5.2billion in losses by March next year and will require billions more to stay afloat.

Public Enterprises Minister Pravin Gordhan said yesterday the national carrier would have to clamp down on corruption and reclaim its market share in the industry.

MPs said they were concerned that SAA would not make a profit soon, and that it should stop relying on government bailouts.

SAA chief executive Vuyani Jarana told MPs they were trying to fix the airline despite the tough trading conditions.

SAA’s projected loss of R5.2bn at the end of the financial year comes after a loss of R5.7bn in the previous financial year.

The airline remains a going concern and has not submitted its audited financial results because of this.

Jarana said they would break even in 2021.

“How long are we going to fund SAA until we break even? We will break even in 2021. In the next six months we will save R500 million in procurement and R400m in human resources. We will go to the item line by line. We know where we will extract value on the big contracts,” said Jarana.

Gordhan said they wanted to clean up state-owned entities and make them attractive businesses.

Gordhan will meet with Finance Minister Tito Mboweni soon on how to provide more funding to SAA.

The National Treasury recently gave SAA a cash injection of R5bn.

The standing committee on appropriations was processing the Special Appropriations Bill that would allow for the channelling of money to the national carrier.

Jarana said the R5bn would go to their funding requirements, and that SAA was still short of money.

SAA has received guarantees of more than R19bn in the past few years, but has continued to incur losses.

Jarana said they had in the past been forced to close down some of the domestic, regional and international routes because of the lack of profit.

They believed that after breaking even in 2021 they would start making a profit over the next five years, he said.

However, Jarana said the important thing was making the right assumptions on the price of oil as it was a key factor in the industry.

The national carrier has complained that the price of oil has impacted on its revenue streams.

He said they believed they were now on course with their plan to ensure they broke even in three years and started turning around the airline.