“SAA pared its losses from R5.6 billion in 2014/15 to R1.5 billion in 2015/16. The improvement resulted mainly from lower fuel prices and lower asset impairments. However, the carrier remains technically insolvent. Its going-concern status depends on state guarantees totalling R19.1 billion. Government continues to help SAA secure funding with its existing lenders.”
A new board, appointed in September 2016, finalised the 2014/15 and 2015/16 annual financial statements as required by law. The National Treasury added that the board is finalising the recruitment process for a chief executive officer and a chief financial officer. The process will be submitted for government’s consideration and approval.
SAA’s liquidity constraints are expected to persist over the medium term. “Government will work closely with the board to reduce associated risks.”
The National Treasury says that during 2017/18, government will provide some financial support to SAA in a manner that does not increase the budget deficit.
“The support will strengthen the new board’s ability to effect a comprehensive turnaround strategy that allows SAA to function on a financially sustainable basis. Advisors are assisting government with a review of the state’s aviation assets. The review is expected to be complete by the end of March 2017. The goal is to develop a stronger, more efficient and sustainable state aviation sector.”