SAA revenue grows 12% to reach R30bn

2015-01-31 09:54

SA Airways group revenue grew 12% to reach R30.3 billion, according to its financial results for the year 2013/2014.

“During the period in review, the SAA Group has realised growth in revenues by 12% (from R27.1 billion to R30.3 billion) with an operating loss (EBITDA) of R374 million reported (R425 million FY 2012/13),” said SAA yesterday.

EBITDA stands for “Earnings Before Interest, Taxes, Depreciation and Amortization”.

Cost containment during the reporting period yielded sustainable savings of R453 million.

“The SAA Group’s domestic operations remain profitable with 10% growth in its profit contribution from R722 million to R791 million.”

African routes grew 17%, from R648 million to R761 million.

“SAA’s long-haul intercontinental operations recorded an increased loss from R1.3 billion in the previous financial year (2012/13) to R1.6 billion in losses reported for the 2013/2014 financial year.”

However re-configurated routes to Beijing and Mumbai were expected to significantly improve performance.

The weakened rand and high fuel prices had affected the financials for period review. Also, revaluation of seven wide-body aircraft owned by SAA resulted in an impairment of R782 million – as well as an extra R192 million write down on related spares and inventory.

There were further impairments relating to the delivery of four new A320 aircraft, part of a 2002 legacy agreement, renegotiated in 2009, for 20 planes.

“However, the contract provides for annual escalations which resulted in the purchase price exceeding the market value at date of delivery – thus leading to a further impairment of R369 million.

Future deliveries on the contract were expected to lead to further impairments, said the airline group.

“SAA’s remaining capital commitment for these purchases is R822 million.”

SAA was one of three state owned companies transferred to the Treasury from the department of public enterprises on December 12 last year after Minister in the Presidency Jeff Radebe said Cabinet was concerned about their performance.

Last week the finance ministry announced that Minister Nhlanhla Nene had approved an additional R6.488 billion guarantee for SAA, taking the total guarantees granted to the airline to R14.3bn, subject to certain provisos.

The release of SAA’s financial statements for the 2013/14 financial year had been delayed because it was technically insolvent. The guarantee allows SAA to borrow more money.

“It is the intent of the Board (reconstituted in October 2014) and SAA management to reduce the reliance on guarantees and return the business to relative stability,” said SAA.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.