SAA has reported a profit to National Treasury this financial year ending March 31, 2023.
According to Daily Investor, Treasury has told Parliament that SAA (as a group) had turned a profit of R500 million for the year, versus a budgeted loss of R740 million. SAA (the airline) turned a profit of R31million.
This would be the airline’s first profitable year since 2010/2011, when the carrier made R782 million in profit.
National Treasury was briefing the Parliamentary Standing Committee on Appropriations on spending outcomes for the end of the fourth quarter of the 2022/23 financial year.
Treasury’s presentation included a breakdown of the finances of various SOEs, Eskom, the Post Office, and SAA.
SAA’s subsidiaries had a year of mixed fortunes – Air Chefs lost R12,6 million, and domestic low-cost airline, Mango posted a loss of R66 million. It was SAA Technical that shone, with a nett profit of R84,4 million.
Treasury says the airline is no longer technically insolvent and has a nett equity value of R670 million at March 31, 2023.
17 years of taxpayer funding
This should be music to the ears of taxpayers who have funded the airline over R50 billion over the past 17 years.
The Treasury’s presentation said SAA had received R50,7 billion in direct government funding from 2007 to 2022, R48,4 billion of it over the past ten years alone.
The R50,7 billion comprised:
- Total direct recapitalisation amount for SAA from 2007 until the airline was put into business rescue in December 2019, was R22,8 billion.
- An additional R16,4 billion, allocated over the 2020 Medium Term Expenditure Framework (MTEF) period to repay government-guaranteed debt.
- R10,5 billion, allocated to SAA in 2020/21 to implement the business rescue plan following the 2020 Medium Term Budget Policy Statement.
- An additional allocation of R1 billion, made to SAA in the February 2023 budget speech for the airline to settle outstanding business rescue process debts.
To save the airline, the Department of Public Enterprises negotiated a deal with the Takatso Consortium to acquire 51% of SAA. That deal has recently been given conditional approval by the SA Competition Commission, provided that a minority shareholders (Global Aviation and Syranix) leave the Takatso Consortium, on the grounds that their continued presence raises competition issues, as they have close associations with competing airline, Lift.
The transaction is now with the Competition Tribunal for its consideration and final adjudication, and it is expected that the deal will be approved imminently.
The remaining 49% shares of SAA will be retained by the Department of Public Enterprises.
