Low bottom line, but SAA boss flies high
Johannesburg - South African Airways’ top official apparently received a multimillion- rand bonus at the time the struggling company suffered one of its biggest financial losses.
In a report tabled by SAA in Parliament recently, it was revealed acting chief executive officer Nico Bezuidenhout received a bonus of R2.8 million last year.
This was the same period that SAA suffered a financial loss of R2.6bn. The 2014 financial loss was double the R1.2bn loss of 2013.
However, SAA would not say on Saturday whether the bonus Bezuidenhout received related only to his time as the head of Mango.
Bezuidenhout was the Mango chief executive until he was seconded to SAA in February last year.
The R2.6bn loss was predicated by a number of factors, according to the SAA report.
It said the increase in fuel prices, a weak rand and tough competition had contributed to the losses.
“Fuel remains the biggest single expense, accounting for 36 percent (up from 35 percent in 2013) of the group’s operating costs, said the SAA report.
“The continued weakening of the currency has had a significant impact on operating costs, as about 60 percent of the group’s costs are foreign currency denominated, whereas only 40 percent of revenues are earned in strong currencies,” it added.
The national carrier has undertaken measures to turn around the situation. The airline admitted it has received bailouts from the government in the past few years.
In October 2013, the government gave SAA a R5bn guarantee.
This led to its competitor, Comair, a British Airways subsidiary, lodging a complaint in the North Gauteng High Court that the bailout was anti-competitive.
However, the court ruled in SAA’s favour last month, clearing any question marks on the bailouts it receives from the state.
Opposition parties in Parliament have also called for the government to stop giving any guarantees to SAA and other state-owned entities (SOEs).
They complained some of the SOEs were bottomless pits, with the state continuing to throw in the money.
A few months ago the government moved SAA from the Department of Public Enterprises to the Treasury.
SAA is one of the three SOEs overseen by Deputy President Cyril Ramaphosa.
A few years ago the government also transferred the Land Bank from the then Department of Land Affairs and Agriculture to the Treasury.
At the time the Land Bank was suffering serious losses and battling to get some of the expensive agricultural and land reform projects off the ground.
The Treasury sent its senior official, Phakama Hadebe, to head the bank, and turn it around.
Subsequently, the Land Bank has been able to improve its financial position.
The Sunday Independent