Johannesburg - Chairwoman of South African Airways (SAA) on Friday said that the airline’s board, management and National Treasury have made commitments to turn the airline’s financial status back to sustainability.
This was after chairwoman Dudu Myeni confirmed that the embattled national carrier had posted a loss of R1.5 billion in the 2015/16 financial year, just a little more that the R1.4 billion it budgeted to lose.
In the 2014/15 financial year, SAA made a R5.6 billion loss.
Speaking during a two-hour delayed media briefing, Myeni said the airline was working on a three-month turnaround strategy in a bid to counter the losses for which she blamed competition, the high cost of fuel and, unproductive routes.
“Although the airline has reduced its losses, the board and the shareholder recognise that the trend of reporting losses cannot persist and that urgent radical actions are required,” Myeni said.
“To mention but a few, these include stabilising the liquidity position of the airline, embarking on the cost-containment aggressively, reviewing the route network, improving staff morale and continuing to deliver a safe, on time and world-class and globally revered airline.”
Myeni said all these areas would be addressed in the content of the broader turn-around strategy which the board was also reviewing and strengthening.
She also said the R4.7 billion government guarantee received from Treasury would be sufficient to keep SAA as a going concern for a foreseeable future.
Acting SAA chief executive, Musa Zwane, said the airline had introduced routes in certain African countries, like the Johannesburg-Abuja route and the Accra-Washington route, as a way of leveraging profitability.
SAA acting chief financial officer, Phumeza Nhantsi, said that the airline was expected to break even and make a “small profit” only in 2021.
Nhantsi also said that SAA was looking at its capital structure in a bid to secure funding, but will be guided by balance sheet as to what kind of capital is required.
SAA said it would also be filling vacant executive positions soon as part of its turnaround strategy.
African News Agency