South African Airways (SAA) has reported its first net profit since 2012, marking a significant milestone in the airline’s road to recovery.
SAA’s financial difficulties
South African Airways experienced a challenging period for more than a decade. This was caused by, among other things, the global pandemic, corruption, and mismanagement. Markedly, in 2020, SAA was forced to temporarily cease operations. However, a comprehensive restructuring effort has enabled the South African carrier to rebuild its foundation. This included scaling down its fleet from 44 to six aircraft, optimising its workforce, and also refocusing its operations across the African region.
During the 2022/23 financial year, SAA operated between six and eight aircraft, serving up to nine destinations. This was the airline’s first full fiscal year of operations since resuming flights in September 2021.
More routes added
Since March 2023, SAA has expanded its network to 16 routes. This includes the return of long-haul flights to Perth in Australia and Sao Paulo in Brazil. Additionally, SAA has increased frequencies to key African destinations including Harare, Lusaka, Lagos, Accra, and Mauritius. It has introduced a new route to Lubumbashi in the Democratic Republic of Congo.
More routes are in the pipeline. The airline’s management plans to double the airline’s current route network. Additionally, it plans to expand its fleet by at least 30% in under 18 months.
What does the future of SAA look like?
The board’s interim CEO professor John Lamola described the positive results as ’emblematic of the hard and careful work that went into the relaunching of SAA as a reliable airline and globally admired brand’.
“We have now entered a period of consolidation of the current route network and fleet strategy and are looking to the next phase of quantum growth as SAA renews its fleet to elevate its customer offering, open more intercontinental routes, and pursue its environmental sustainability goals.”
SAA’s interim CEO John Lamola
My Broadband reported that SAA’s interim board chair Derek Hanekom stated that a step in the right direction was that the management and board no longer took instructions from politicians about the airline’s strategic direction.
Hanekom, a senior member of the ANC, was one of President Jacob Zuma’s most outspoken critics during the Gupta State Capture era.
The Zondo Commission of Inquiry found that political interference had played a role in SAA’s financial deterioration.
Although Transport Minister Barbara Creecy and the SAA interim board have confirmed the airline will no longer require government funding, it needs a private partner to ensure long-term success.
However, Hanekom said the board had no ‘interest, desire or appetite’ to privatise SAA as it believed the airline could again be a valuable asset to the South African economy.
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