SAA records loss of R1.46bn in first quarter
Struggling South African Airways (SAA) has recorded a R1.46 billion loss in the first quarter. It’s about R70 million worse than the previous financial year’s loss.
This comes as debt of R6.7 billion matures at the end of September. The airline currently has R19.1 billion of government guarantees, R2.7 billion of which isn’t being utilised.
Parliament documentation shows SAA’s income dropped 8% in the first quarter versus the same period in the previous year and is 10% below target.
National Treasury announced the appointment of Vodacom’s Vuyani Jarana as new SAA CEO this week. Finance Minister Malusi Gigaba believes he’ll be key in turning SAA around.
Ahead of SAA’s appearance before parliament yesterday, DA shadow deputy finance minister Alf Lees said it wasn’t clear how its losses would be stopped and how the loans that mature at end September would be repaid.
Treasury had to step in a month ago with a R2.2 billion bailout when Standard Chartered Bank refused to extend a loan to SAA when it matured.
Lees said the board appointed 10 months ago hasn’t stemmed losses. Instead they’ve increased.
The documentation provided to parliament shows SAA’s finance cost has increased 37% in the first quarter versus the same period in the previous financial year. SAA explains this as “a result of greater reliance on debt finance to fund the group’s operating activities”.