It has been exposed that SAA misfortunes will continue. The South African Airways’ (SAA) projected losses for the 2016/17 year is R3.5 billion.
This revelation was made in the replies to questions members of the Standing Committee on Finance asked the South African Airways.
The projected loss of R3.5 billion represents a R2 billion increase from the 2015/16 loss. It’s on record that SAA declared R.1.5 billion loss in the 2015/16 year.
Reacting to the latest development in SAA misfortune, the Democratic Alliance (DA) party lamented thus:
“There is no doubt that these massive losses will mean that SAA will once again run out of cash and will have to pull out the begging bowl to get another government guarantee hand-out.”
With the above, the opposition party disclosed that it will write to Pravin Gordhan, the Finance Minister and urge him to reject any further assistance to SAA.
To the DA, SAA “is set on a path to self-destruction.” the party said:
“It is greatly concerning that this is R 1.8 billion more than the R 1.7 billion loss that was projected a mere four months ago. This will represent a real cash loss as it will not contain the R 1.9 billion Airbus deal impairments that contributed to the R 4.9 billion loss in the 2014/15 year.
“It must be asked whether the 2015/16 loss was massaged down to make the old SAA board and Chairperson, Ms Dudu Myeni, in particular, look like they were making good progress.
“The new board of SAA has clearly not been able to turn SAA around or even just stem the massive losses. The board is hamstrung by the apparently poor and incompetent leadership of its chair Dudu Myeni.
“This once again reinforces the DA’s view that the reappointment of Ms Myeni as the Chair of the SAA board was irrational.”
Thereafter, DA proffered that SAA can only be saved from the financial apocalypse coming its way when it’s subjected to an immediate business rescue.
And, “action taken to achieve a private equity deal that would result in capital revenue for the shareholder and thus the taxpayer.”
Meanwhile, the party demanded of SAA to produce a cash flow analysis for the 12 months of the current 2017/18 financial year. According to DA, the cash flow analysis will expose the full extent of SAA bankruptcy.
“(We are) even more convinced that the only way to stop the monumental losses is to put the airline into business rescue… We will, therefore, make every effort to ensure that the Minister of Finance takes action to achieve this,” DA promised.