South Africa’s new finance minister, Tito Mboweni, has spoken openly about what needs to be done to solve the country’s economic problems.
In late November SAA’s interim chief financial officer, Deon Fredericks, told parliament that the airline had recorded a loss of R5.7 billion in the 2017/18 financial year.
Africa Check pulled out SAA’s financial statements to check.
What do the numbers show?
Africa Check pulled the group’s annual financial statements going back to 2011.
“Based on the figures, they haven’t made profits starting from the 2011/12 financial year,” Wayne Van Zijl, a senior lecturer in the School of Accountancy at Wits University, told Africa Check after reviewing the statements.
In 2010/11, the group made a profit of R782 million. The financial year runs from 1 April to 31 March the following year.
In 2016/17, the last financial year for which statements have been published, SAA made a loss of R5.6 billion.
|Summary of SAA Group Annual Financial Statements Since 2010/11|
|2010/11||R782 million profit|
|2011/12||R843 million loss|
|2012/13||R1.2 billion loss|
|2013/14||R2.6 billion loss|
|2014/15||R5.6 billion loss|
|2015/16||R1.5 billion loss|
|2016/17||R5.6 billion loss|
|2017/18||R5.7 billion loss*|
* Reported to parliament in November 2018 by SAA
Many problems facing national carrier
Why has SAA lost so much money over the years? There is no one answer, according to Professor Rose Luke, a lecturer in the department of transport and supply chain management at the University of Johannesburg.
She pointed to less profitable routes, high maintenance costs and poor fleet management.
Head of economic and business sciences at the University of the Witwatersrand, Jannie Rossouw, has argued that the airline’s financial situation is a result of “persistent mismanagement and cronyism” coupled with the South African government’s refusal to make “tough decisions about the company”.
Conclusion: SAA has not made a profit since the 2010/11 financial year
News websites have reported that South African Airways, the national airline, has not made a profit since 2011.
The airline’s annual financial statements show that this is correct. It was last in the green in 2010/11, when it made a profit of R782 million. According to the airline, it expects losses to continue in 2018/19 and 2019/20.
The airline told parliament that it hopes to break even by 2021.
Edited by Kate Wilkinson
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