SAA revises operating loss upwards by R1 billion
SA AIRWAYS is projecting a R4.490 billion loss for the 201617 financial year, which is significantly higher than the R3.5 billion loss disclosed to Parliament about two weeks ago.
This emerged yesterday before the national airliner’s appearance before the finance portfolio committee tomorrow.
SAA, led by its chairwoman Dudu Myeni, is expected to make a presentation to the committee on its quarterly report.
However, a document prepared by the airline for the committee’s meeting said the company continued to make losses, which were blamed on “significant” shortages of revenue and persistently high base-costs.
“Shortages in revenue were driven largely by a 14% increase from the prior period, which was not realistic on the prevailing market conditions,” the report said.
“The company in the 11-month period has posted a loss of R4.490bn versus budgeted loss of R1.4bn.
“It is important to highlight that the budgeted loss did not take into account the expected movement of the exchange rate,” the report said.
“This was because of the volatility that can present to the financials of the company. The best practice is not to budget for it.”
Just three weeks ago, the airliner notified the committee it was focused on growing its revenue and applying cost-cutting measures.
But the board has assured the committee that SAA has not reduced its losses for the year under review.
“The budgeted loss for 201617 was set at R1.76bn, but the revised forecast refers to an expected loss of R3.5bn,” it said.
Yesterday, the DA’s Alf Lees said the new figure of R4.5bn was significantly higher than the R3.5bn revealed 10 days ago, and the R1.7bn estimated in September 2016.
“This is an increase of R1bn in the space of 10 days and an increase of R2.8bn in six months. With a full month of figures left to be reported on, this figure of R4.5bn could experience yet another significant increase,” he said.
This figure could experience another increase