Failed airline South African Airways (SAA), has presented its draft financial results for 2018 and 2019 to the Standing Committee on Public Accounts (SCOPA), showing R16 billion in losses over the last three years.
According to the statements, as published by the DA’s Alf Lees, the airline recorded a loss (after tax) of R5.4 billion in 2017, R5.5 billion and R5.1 billion in 2018 and 2019, respectively.
This marks the first time the airline has presented its financials since 2017, and the first time the public has gained any insight into its financial situation since the group entered into business rescue in December 2019.
The airline has not turned a profit since 2011, and has received R57 billion in bailouts since 1994. The group meanwhile, secured R3.5 billion in ‘funding’ from the state-owned Development Bank in February 2020.
“What this shows is that, the multi-billion rand bailouts by government over the years have failed to cure the ills of the badly run airline,” Lees said.
While most categories of operating costs have decreased over the last three years, SAA’s financials show jumps in data costs, fuel costs and employee costs. This, at a time that airline has been trying to cut flights and retrench staff in a bid to save money.
According to SAA’s business rescue practitioners, without further funding from the government, there are only two options left for the airline: wind up or liquidate. However, this has brought the administrators into direct conflict with the Department of Public Enterprises (DPE), who has said that liquidation is not an option.
On Thursday (14 May), the two parties signed a memorandum of understanding that they would work together to deliver a rescue plan for the airline – while agreeing not to sell or negotiate to sell any of the airline’s assets.
The DPE, meanwhile, has reportedly asked SAA staff to take pay cuts – of up to 50% for the highest paid employees – to help keep the airline going.
The administrators had tried to proceed with a retrenchment process, offering all staff the option to sign on to voluntary retrenchment packages, however unions approached the Labour Court and succeeded in shutting this process down on the grounds that it was unfair, given no business rescue plan has been tabled.
Finally DRAFT SAA financial statements for 2018 & 2019 were tabled at SCOPA this evening. Losses of R5,5bil in 2018 & R5,1bil in 2019! pic.twitter.com/iXDv8DxJLg
— Alf Lees (@SquireLees) May 14, 2020