‘Wings far from clipped’: SAA CEO says airline doesn’t need R3.5 billion injection

SAA celebrates a year of returning to the skies next month and may not look to the department of public enterprises for more money – yet. The airline responded to rumours that it was losing between R50 million and R500 million every month. The Democratic Alliance (DA) MP Alf Lees also speculated that SAA may need another bailout of about R 3.5 billion this year. ALSO READ: Will SAA-Takatso deal finally take off? Professor John Lamola, chair and chief executive of SAA, said: “The narrative that the R3.5 billion is another injection is a typical mischievous and disingenuous anti-SAA rhetoric….

SAA celebrates a year of returning to the skies next month and may not look to the department of public enterprises for more money – yet.

The airline responded to rumours that it was losing between R50 million and R500 million every month.

The Democratic Alliance (DA) MP Alf Lees also speculated that SAA may need another bailout of about R 3.5 billion this year.

ALSO READ: Will SAA-Takatso deal finally take off?

Professor John Lamola, chair and chief executive of SAA, said: “The narrative that the R3.5 billion is another injection is a typical mischievous and disingenuous anti-SAA rhetoric.

“It is not a rumour but publicly known that the R3.5 billion mentioned is the outstanding post-commencement funding that the government committed to for the conclusion of the business rescue plan.

“The figures mentioned are a fabrication and far from reality. SAA’s 2022/23 losses and gains will be communicated in the annual financial statements.”.

But times are tough for airlines, despite the perceived profiteering after the steep hike in airfares.

“SAA, like most airlines, operates in an environment that is beleaguered by the ramifications of the global pandemic. The Russia-Ukraine conflict has exacerbated the situation by sending the oil and dollar prices into a tailspin,” he said.

But SAA is content with its load factors now.

Lamola said that the business was gratified by the healthy load factors it enjoys on several routes.

“I don’t think any airline is ever comfortable with their yields.”

Consumers are feeling the pinch of rocketing airfares that are digging deep into disposable income.

However, Lamola pointed out that pre-Covid prices were not a proper reflection of the input costs and financial demands on airlines.

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“The pre-pandemic air fares and during and Ukraine war never reflected the true cost of operating an airline and the current fares may be slightly higher, but still not at a satisfactory level.”

Scarcity of seats have not been the primary driver of high flight prices.

Comair’s exit and the capacity that went out the window along with it was quickly replaced by carriers like FlySafair, Cemair and Airlink.

Lamola said of the present high fares: “The biggest driver of increases is the significant increase in the fuel cost. The recent depreciation of the rand against the dollar has not helped, this given the dollar dominated aircraft lease costs.”

SAA presently operates about eight routes with 70 flights weekly.

The airline reintroduced some of its continental routes recently, notably to Ghana and Mauritius.

A planned collaboration with Kenya Airways is also on the cards. And plans are afoot to grow.

“While air passenger services are relatively modest, SAA is committed to providing connectivity within Africa.

“We are working on adding several regional routes in the upcoming months. We are also working on partnerships to connect Africa with the world.”

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