SAA suffers R991m loss, revenue up by 14%

2014-01-29 16:53

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The revenue of cash-strapped SA Airways (SAA) increased for the 2012/2013 financial year, according to the national carrier’s chief financial officer, Wolf Meyer.

“Our revenue income is up by 14% ... cost savings are in excess of R1 billion,” he told reporters in Kempton Park, east of Joburg, today.

“SAA has a very weak balance sheet. We do, however, have the R5 billion guarantee from shareholders.”

He said SAA suffered a loss of R991 million but the guarantee put SAA in a position to operate.

Meyer said the airline’s revenue increased by 14% from R22.6 billion in the previous financial year to R25.6 billion.

This was due to increase in airfares, increases in passenger revenue and an increase in capacity.

Airfares increased by 7% – a move partially driven by the weakening of the rand.

“The rand weakened ... and had a negative influence on our operating expenses. In real terms costs are down by two percent from the previous financial year.”

Operating costs were up by 12% from R24.6 billion to R27.5 billion.

Public Enterprises Minister Malusi Gigaba said no bonuses were paid to executives.

He said it was important to stabilise the airline’s finances and they knew it would take time.

On September 10, Gigaba unveiled a 12-year turnaround strategy for SAA to consolidate its routes and update its fleet.

The strategy was aimed at bringing the national carrier back to a point where it could leverage off its balance sheet.

SAA reported a loss of R1.25 billion in 2012.

In May, Business Day reported that SAA postponed its bond issue in favour of borrowing R1.5 billion from two banks. The R1.5 billion was working capital to keep operations running while SAA grappled with high fuel prices and its loss making, long-haul business in a highly competitive market.

SAA used a R5 billion state guarantee extended to it last year to secure the loan.

In January last year, SAA received a R550 million bank “facility” to cover fuel and other short-term commitments.

In 2012, the airline said its losses over the past decade amounted to R14.7 billion.

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