SAA losses snowball, state outlines revival

Airline expects to break even by 2021, its chief executive says.
Picture: Ian Waldie/Reuters

South African Airways’ (SAA) net loss more than trebled to R5.6 billion in the 2016/17 financial year, Chief Executive Vuyani Jarana said, as officials mapped out a turn-around strategy for the struggling state airline.

SAA, which has not generated profit since 2011, is regularly cited by ratings agencies as a drain on the government’s purse. It made a loss of R1.5 billion in 2015/16.

Jarana told a news conference on Thursday that SAA expected to break even by 2021 and that it was in talks with unions about reducing staff costs.

Selling a stake in the airline to an equity partner – a long-held plan which was discussed as far back as 2016 – was about two years away, he added.

This week the head of the Treasury said selling 49% of SAA was a theoretical example of how the government could narrow the budget deficit.

Finance minister Nhlanhla Nene told the same news conference that the turnaround strategy would include a review of the airline’s fleet and loss-making routes. ($1 = 11.8008 rand)

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Same old lies. Anybody who supports the corrupt SAA and Mango has rocks in their head.

Does this mean 3 more years of wasting Tax Payer money???

For what?

SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL,SELL SAA

Except who would buy it?
I agree it needs to go and is a pointless relic but its so far down the abyss that theres no value left.

Would you buy shares in the privatised SAA? If not why would anybody else? What is the value of it? Remember, even if they sell/privatise it the BEE, AA and other laws would still apply, so it would be very hard for it to compete against other airlines.

Why must we pay for SAA if we are not flying?

Every Tax payer who pays more than R100,000 in Tax for the year should get one free local ticket and one free overseas ticket.

Since we’re using SOEs as a form of social welfare anyway. Shouldn’t we just relax the labour laws so we can hire/fire without cause and right-size the businesses and then instead just use the additional funds for social welfare.
We’re heading in this direction anyway because new tech. will take all these jobs globally and we can put in place a universal basic income.

How stupid would someone have to be to buy a minority share in SAA? Your vote will be vetoed by people with zero skin in the game and you will have to pay for your share of the losses. If you raise the obvious things like huge staff reductions and salary freezes and route cuts you will simply be outvoted and have to take the loss. I would be surprised if they find someone that stupid with the money. But lets see. That will anyway just last until that partner has lost it all. AND THEN?

The amount of money wasted by SAA every year is enough to act as a government guarantee to banks, to enable them to fund the purchases of 1500 farms for land reform every year. With the SOE’s as intermediaries, the ANC is stealing the land from their own voters. If government stopped throwing good money after bad, by bailing out SOE’s, the money could be used to guarantee bank loans to emerging farmers. It won’t be a cost to the Fiscus because it is only a guarantee and not an expense.

The banks are ready to make loans to new farmers, they are just waiting for government to carry a part of the risk. There are many emerging farmers who want an opportunity to own land, they are waiting for funding. Many farmers want to sell their property, they are just waiting for government to wake up. So here we are, all waiting for a hopelessly inept and corrupt government to wake up to the fact that the free market solution to land reform is right in front of them. If government uses the annual bailouts, plus the state guarantees for failing SOE’s to guarantee bank loans to new farmers, the land issue wil be resolved within 5 years.

Actions speak louder than words. Government has the solution to land reform, but they choose not to use it. They prefer to fund the looting at SOE’s with the money that could have been used for land reform.

When one travels on airlines such as the Gulf Airlines, Singapore Airlines or Cathay Pacific, someone from the Cabin staff goes up and down the aisle all night serving drinks etc.
On SAA, the cabin staff serve supper after takeoff. They then pack up and go to sleep for the rest of the night. The passengers are left to their own devices.
Which airline would you fly on?

If MacDonalds was making a loss in South Africa, would Cyril carry the business for 3 years?

he he I don’t know what Cyril’s shareholding in McD’s is but I guess it depends where the money is going. If he was effectively stripping out cash to pay himself at the expense of other shareholders (cadres getting the loot and out of taxpayers in the case of SAA) he would not be too worried about the loss; until it could no longer be sustained of course. I think that is what SAA is doing and what Cyril may be doing at McD’s; although not to the extent that it shows a loss. So he sees nothing wrong with the system described.

“Turnaround strategy” is the most over-used phrase in SAA’s lexicon. Big yawn.

SAA hasn’t flown Boeing 747s for years, so it escapes me why article after article on MoneyWeb is illustrated with a proud Jumbo in SAA livery, as if somehow grasping for the glory days of SAA – if ever there were any. As with their current London route cut, they said the aircraft were unprofitable and grounded them when other airlines happily and profitably used them for years and still do. How can one take SAA seriously when they say the LHR-JNB route is unprofitable at the same time as BA upgrade their twice daily flights to larger A380s to cope with demand on this route and Virgin announce a second daily flight?

End of comments.

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