The leadership at SAA has no idea how bad the airline’s financial situation is.
Yesterday, acting chief executive Nico Bezuidenhout told the portfolio committee on public enterprises that the airline would only have the final figure for its funding requirement when it had reviewed its route network. SAA anticipates that it may cut the number of routes it services.
However, Bezuidenhout said it was embarrassing for the parastatal to repeatedly run to the shareholder to bail it out from its financial troubles. “I do not believe that we have the liberty to turn to our shareholder and look for operational funding going forward.”
He said every amount SAA might request should be directly tied to capital and equipment that the airline needed.
The Department of Public Enterprises told the committee that after conducting research on SAA, it had discovered that there was no long-term vision for the company. SAA was living from hand to mouth as it had depleted its surplus cash resources. It then emerged that when the company had disclosed the extent to which its financial troubles had deepened, it was not totally honest.
The department’s director-general, Tshediso Matona, said when looking at some of the turnaround models presented by SAA, the funding requirement kept shifting and the department had decided to do its own digging. It had then discovered that the money needed by SAA was more than what the company had stated.
“How can a business not be absolutely precise about the amount of funding it requires?” he asked MPs. All the while, during the department’s interaction with SAA, it had “been given a sense that everything is fine”.
But SAA chief financial officer Wolf Meyer said its audit committee was concerned that the company was under-capitalised and management wanted to address this in the long-term strategy. This was despite the numerous bailouts SAA had received and the R5 billion guarantee the Treasury gave it last year.
The new long-term strategy was expected to be finalised and presented to the shareholder at the end of March. But committee members lashed out at SAA for failing to convince them that this time it would keep its promises.