JOHANNESBURG - National airline SAA sunk further into debt for the nine months period to end December posting a R1billion revenue shortfall to take its total losses for the 2017/18 financial year to R4.8bn.
SAA said yesterday that the losses - which it attributed to low passenger numbers and higher operating costs driven by increased fuel and maintenance costs - indicated that its liquidity would remain dire for the entire financial year to end March.
Board member Martin Kingston said the weak balance sheet made it difficult to attract a strategic equity partner.
“We have been dropping market share in domestic, regional and global routes,” Kingston said. “If we are to return this company to profitability we have to take difficult and painful decisions. We are haemorrhaging customers at the moment.”
Three weeks ago, Auditor-General Kimi Makwetu told Parliament that SAA lost R5.67bn during the 2016/17 financial year.
The results for 2017/18 will be released at SAA's annual general meeting tomorrow.
Kingston said the situation meant that the equity partner would probably be found in the medium to long-term.
“As of today there are no providers of capital until they see the airline is in safe hands. We have to exist on the support of the state,” said Kingston.
SAA said its revenue declined 4percent to R23.3bn against a budget of R22.2bn. It said operating costs rose 2percent to R23bn compared to the corresponding period last year.
In the 2015/16 financial year SAA shed R1.56bn.
SAA board chairperson Johannes Bhekumuzi Magwaza admitted the financial distress of the airline.
“If you look at how many years the airline has been in that position we are making sure that within a sensible time we are out of the rut,” Magwaza said. “We are engaging with the shareholder and the Deputy Minister (Mondli Gungubele) says there is a task team. We are also engaging suppliers. We can't afford to trade recklessly as an airline.”
Magwaza refused to give reasons for the suspension of chief financial officer Phumeza Nhantsi and chief executive for SAA Technical Musa Zwane, citing confidentiality.
Nhantsi and Zwane were suspended two weeks ago by the airline.
Magwaza said the law was clear that the reasons cannot be divulged in public, adding that there would be a disciplinary hearing against the executives.
"We can't share the reasons why people have been suspended,” said Magwaza.