{"id":813567,"date":"2025-03-02T10:00:00","date_gmt":"2025-03-02T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=813567"},"modified":"2025-02-28T14:16:30","modified_gmt":"2025-02-28T12:16:30","slug":"the-state-owned-enterprise-that-stopped-publishing-annual-reports-but-still-got-billions-in-bailouts","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/813567\/the-state-owned-enterprise-that-stopped-publishing-annual-reports-but-still-got-billions-in-bailouts\/","title":{"rendered":"The state-owned enterprise that stopped publishing annual reports but still got billions in bailouts"},"content":{"rendered":"\n

South African Airways (SAA) stopped reporting its finances for several years in South Africa but still received billions in government bailouts.<\/p>\n\n\n\n

SAA stopped publishing reports when it entered business rescue in 2019. This came after the SOE struggled with liquidity challenges, negative publicity and a weak balance sheet.<\/p>\n\n\n\n

The problems were so bad that the group was technically insolvent, meaning that its assets would not be enough to pay off its liabilities if it were liquidated.<\/p>\n\n\n\n

Upon entering business rescue in 2019, SAA failed to publish any annual reports from 2017\/18 through to 2021\/22 financial years. <\/p>\n\n\n\n

In early 2020, Former Public Enterprises Minister Pravin Gordhan said that the finances would not be made publically available amidst the fears that their release would force the SOE into liquidation.<\/p>\n\n\n\n

Gordhan stressed that the government was entering unknown territory as SAA was the first SOE to ever be placed under business rescue.<\/p>\n\n\n\n

At the time, parliament said that it understood the consequences related to premature exposure of the financial statements.<\/p>\n\n\n\n

However, it stressed the importance of publishing them to understand what led to SAA’s financial struggles. It said that the joint committee was left in the dark without the relevant reports.<\/p>\n\n\n\n

Pressure would continue in the following years, with many members of parliament concerned about the lack of transparency at SAA. <\/p>\n\n\n\n

The operating environment would only get worse for SAA from Gordhan’s comments in 2020, with the airline having to contend with the COVID-19 pandemic.<\/p>\n\n\n\n

The group was forced to suspend all international flights due to the pandemic and underwent extreme cost-cutting measures as part of its business rescue process.<\/p>\n\n\n\n

The airline had to offer severance packages to the majority of its workforce. By 2021, the group would exit business rescue proceedings but required massive cash injections.<\/p>\n\n\n\n

Although SAA is a “luxury” SOE and not entirely necessary to the running of South Africa, it still received billions in government bailouts, second only to Eskom.<\/p>\n\n\n\n

Between the 2018\/19 and 2022\/23 financial year, SAA received R37 billion rand in bailouts. The most came in 2020\/21 when South Africa was deep in the pandemic.<\/p>\n\n\n\n

Year<\/th>Bailout<\/th><\/tr>
2018\/19<\/td>R5 000 000 000.00<\/td><\/tr>
2019\/20<\/td>R5 500 000 000.00<\/td><\/tr>
2020\/21<\/td>R18 275 000 000.00<\/td><\/tr>
2021\/22<\/td>R6 778 000 000.00<\/td><\/tr>
2022\/23<\/td>R1 583 000 000.00<\/td><\/tr>
Total<\/strong><\/td>R37 136 000 000.00<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

The latter bailouts also came amidst plans by the government to sell a large stake in SAA, with part-privatisation of the entity a central aim for Gordan, who passed away in 2024.<\/p>\n\n\n\n

However, following three years of negotiations with the Takatso Consortium, which included Global Airways and private equity firm Harith General Partners, the deal was called off last year.<\/p>\n\n\n\n

The deal would have seen the Consortium take over 51% of the struggling entity. However, the government believed that it would not get fair value for SAA’s assets if it proceeded with the deal.<\/p>\n\n\n\n

Signs of life<\/strong> <\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

Despite the struggles of SAA, recently released data points to a better performance from the group, with it even posting a profit. <\/p>\n\n\n\n

In early 2024, several past unreleased results were released to the public, showing a combined loss of R23.5 billion from 2018\/19 to 2021\/22.<\/p>\n\n\n\n

This was made up of 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.<\/p>\n\n\n\n

Notably, reports from the Auditor General showed that between March 2019 and March 2022, SAA lost R44.4 billion due to corruption.<\/p>\n\n\n\n

The Auditor General also questioned the reliability of the financial reporting and issued several disclaimers. <\/p>\n\n\n\n

The entity is now under the oversight of Transport Minister Barbara Creecy after the Public Enterprise portfolio was closed. <\/p>\n\n\n\n

However, the airline, together with its subsidiaries, posted a net profit of R252 million in 2022\/23. Total revenue also increased by 183% to R5.7 billion over the period.<\/p>\n\n\n\n

The 2022\/23 financial year was the first fiscal period of commercial operations for SAA since it exited business rescue in 2021.<\/p>\n\n\n\n

Over the last two years, SAA has also increased the number of international flights from South Africa. This includes flights to Perth, Australia; Sao Paulo, Brazil; Mauritius; and more.<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite receiving billions in government bailouts, SAA did not publish its annual report for several years. <\/p>\n","protected":false},"author":95,"featured_media":644871,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[84,1675],"class_list":["post-813567","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-pravin-gordhan","tag-saa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=813567"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813567\/revisions"}],"predecessor-version":[{"id":814656,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/813567\/revisions\/814656"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/644871"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=813567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=813567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=813567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}