State-owned South African Airways (SAA) on Tuesday said it was again taking “urgent steps” to address issues raised by the Auditor-General’s (AG’s) office in its 2016/17 audit report, which was released last week.
“The AG has given us a comprehensive diagnosis into key areas of our business and this has provided deep insights,” SAA CEO Vuyani Jarana said in a release issued on Tuesday.
The report formed part of SAA’s integrated report along with financial results for 2016/17, which were due to be announced later this month. The airline has incurred a net loss of R5.57-billion and expected that its financial situation will not be much different for 2017/18.
Jarana again called for funding for the airline’s proposed five-year plan and turnaround strategy, noting that it required support from its shareholder. SAA already received a R10-billion bailout from National Treasury last year, in an attempt to improve its balance sheet.
“SAA has had many previous turnaround strategies which have not been implemented before. This time it is different: we believe the vision outlined by the board is absolutely correct and are committed to ensuring it is put into practice.
“However, it is important to note that SAA has never been properly capitalised, and any company has a defined maximum debt capacity beyond which debt becomes a burden,” said Jarana.