Fuel costs, fleet delays push SAA to R354m loss
Revenue climbs, but losses widen
The 2023/24 financial year marked the second full year of operations since SAA exited business rescue in April 2021.
The airline posted revenue of R7.0bn – up 23% year-on-year – but EBITDA declined from a positive R436 million to a negative R90m, with the Group swinging from a R210m profit in the previous year to a R354m loss.
Contributing to the decline was a R415m foreign currency translation loss linked to rand volatility, as well as external pressures including the Ukraine conflict, which drove up jet fuel costs from R1.3bn to R1.9bn.
Leasing costs also rose more than 30% due to a global aircraft shortage, while delivery delays in budgeted aircraft further limited revenue growth.
Strong balance sheet despite operating pressures
SAA’s financial position remained stable, with R1.4bn in cash and cash equivalents and no outstanding borrowings. The Group holds R6.4bn in equity.
Over the period, SAA operated with an average fleet of ten aircraft across 15 destinations, increasing flight activity by 42% and launching routes to São Paulo from both Johannesburg and Cape Town in the second half of the year.
Strategic reconstruction underway
“These results detail a phase of intense uncertainty in the resuscitation of SAA as the assumption of the company's control by the strategic equity partner was awaited,” said Prof. John Lamola, SAA Group CEO.
“Since then, we have entered a period of structured and strategic reconstruction of the business, focusing on institutionalising robust governance and management systems, whilst implementing plans on aircraft fleet and route network expansion and elevation of customer experience.”
Finalising legacy audits
The FY2023/24 financials represent the final outstanding audits from SAA’s business rescue period. The airline had initially reported a R60 million profit for the year after recognising a R431m gain from the derecognition of business rescue creditor obligations.
However, auditors concluded this amount should have been treated as a prior-period adjustment to retained earnings.
This correction resulted in a restatement of the net result from a R60m profit to a R371m loss, with a corresponding impact on the Group’s performance.
Audit improvement plans in place
To improve future audit outcomes and rebuild confidence in its reporting processes, SAA’s board has introduced an Audit Health Plan. This includes standardising key controls, expanding internal audit functions, and strengthening engagement with external auditors. Having completed six audits in three years, SAA says it is now in a position to meet statutory reporting deadlines consistently.
"The FY2023/24 results reflect significant progress in SAA’s financial health. We have strengthened the channels of our revenue streams and cost containment measures; we have a debt-free, asset-rich balance sheet that is supporting the steady growth of the airline and the recovery of SAA as a global aviation brand," says Lamola.
“This evident recovery of SAA could not have been achieved without the support of our shareholder representative, Minister Barbara Creecy and the Department of Transport, the principled leadership and guidance of the chairperson, Derek Hanekom, and the steadfast commitment of the SAA Interim Board," he adds.