Wednesday, 28 November 2018
Cape Town: The South African Airways (SAA) has in the 2017/18 financial year incurred more losses than budgeted due to its inability to execute its strategy, says Chief Executive Vuyani Jarana.
Jarana said the key issues facing SAA are a weak balance sheet and negative equity, liquidity challenges, negative publicity as well as previous board dynamics.
In addition, suppliers have lost confidence in SAA, forensic reports point to rampant corruption and banks closing credit lines to the national carrier.
Jarana was briefing the Portfolio Committee on Public Enterprises on the progress of SAA in implementing the airline’s turnaround strategy.
SAA informed the committee that it has since revised its strategy and turnaround plan to build a commercially focused airline with customer experience as its cornerstone.
“The approved 2019/2023 corporate plan forecasts to break even by the 2021 financial year. The airline will incur financial losses of R5.2 billion and R1.9 billion for the financial years 2018/19 and 2019/20, respectively and thereafter SAA expects to be profitable for the remainder of the five-year period,” SAA said.
During the Medium Term Budget Policy Statement, the airline received an additional R5 billion special appropriation to help the airline pay off its debt.