Massive swing for SAA – first profit in over a decade

South African Airways (SAA) has reported some steady growth for the 2022/23 financial year; a big change after a period that nearly left the national carrier grounded for good.

The Interim Board of SAA presented the results at the Annual General Meeting (AGM) attended by Transport Minister Barbara Creecy on 20 November 2024.

The airline, together with its subsidiaries, posted a net profit of R252 million – the first time the airline has been in the black since 2012.

This stands in stark contrast to the combined R23.5 billion in losses reported over the previous four years.

This includes before-tax losses of R6.5 billion in 2018/19, R5.7 billion in 2019/20, R7.6 billion in 2020/21, and R3.7 billion in 2021/22.

Total revenue increased by 183%, from R2 billion the prior year, to R5.7 billion.

“SAA airline operations turned a prior year’s negative [earnings before interest, taxes, depreciation, and amortisation] of R1 billion into a positive R277 million,” said the carrier.

“These pleasing results of the 2022/23 financial year are emblematic of the hard and careful work that went into the relaunching of SAA as a reliable airline and globally admired brand,” said SAA Interim CEO Professor John Lamola. 

“This has put SAA on a path to financial sustainability without reliance on the fiscus,” he added.

The 2022/23 financial year is the first fiscal period of commercial operations since SAA exited business rescue and restarted operations in September 2021.

Back in 2019, SAA, which had around R28 billion in liabilities and was seen as a black hole for taxpayer-funded bailouts, was placed under business rescue (which it exited in 2021).

Between 1 April 2018 to 31 March 2023, the South African government injected over R38.1 billion into SAA.

Of the R38.1 billion that the airline received over the years, R27.6 billion was deposited into the airline post the business rescue process (up to March 2023).

However, earlier this year, the government assured that the public does not need to fret about the government dipping into state coffers to keep the airline operational.

“We want to make that clear; there’s no going back to the past there’s no reliance on government itself… [SAA] must run its operations as efficiently as it can and as profitably as it can and sustain itself,” late Public Enterprises Minister Pravin Gordhan previously said.

This was echoed by Lamola, who recently said that “the previous glory of SAA was artificial because it was funded by taxpayers’ money.”

“The SAA we are building is one that can generate its own revenues and cover its own operational costs,”  he added.

SAA said that this 2022/23 performance “is particularly notable given the challenging global aviation environment at the time and the then uncertainty around the future of SAA with a strategic equity partner.”

The International Air Transport Association (IATA) Annual Report 2023 notes tough economic times for air transport worldwide, with the pressures of post-Covid recovery, persistently high interest rates, the war in Ukraine, and the highest oil (and therefore jet fuel) prices impacting airlines’ sustainability.

In the 2022/23 financial year, SAA operated between 6 to 8 aircraft during the financial year, serving up to 9 destinations.  

“Since then, a prudent fleet expansion plan has seen the number of operated aircraft double, and seven more aircraft rented for delivery during the financial year 2025/26,” said SAA.

Since the period ended in March 2023, the airline has increased its routes to 16, including the achievement of the launch of Perth, Australia.

The first intercontinental route to Sao Paulo, Brazil was launched in October 2023.

Earlier this year, SAA announced additional frequencies to Harare, Lusaka, Lagos, Accra, Mauritius Kinshasa and Perth. The national flag carrier also introduced a new route, to a second destination in the Democratic Republic of Congo, Lubumbashi.

SAA said that in the process, it “has been a conscientious creator of jobs.”

Including the subsidiaries, Air Chefs catering, and SAA Technical aircraft maintenance facilities, the size of the staff has grown from 800 to the current total number around 2000, which includes 140 pilots. 

“We have now entered a period of consolidation of the current route network and fleet strategy and are looking to the next phase of quantum growth as SAA renews its fleet to elevate its customer offering, open more intercontinental routes, and pursue its environmental sustainability goals,” said Lamola.

Not out of the woods

This does not mean that the airline is out of the woods.

A reportedly now debt-free SAA assured that it will not be requesting additional funding from the government. However, the airline requires a cash injection investment through an equity share partner to reach a healthy financial state and return to its “glory days”.

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