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SAA bleeding as competition hots up‚ acting finance chief tells MPs

By Linda Ensor | 2016-11-16 12:04:01.0 | COMMENTS [ 18 ]

SAA is bleeding from the intense competition on the domestic market‚ with rivals gouging out R1bn revenue in the second quarter of the 2016-17 financial year‚ acting chief financial officer Phumeza Nhantsi told Parliament’s finance committee on Wednesday.

The state-owned airline carried 159‚000 fewer passengers — a 4% decline — compared with its budget‚ due to the entry into the market of two new low-cost carriers and the fact that foreign airlines such as Emirates‚ Ethiopian and Qatar are flying direct to Durban and Cape Town‚ which had neutralised domestic fares.

However‚ Nhantsi said the loss in revenue was compensated for by R1bn in cost savings‚ particularly on fuel.

All in all‚ SAA was pleased with the performance in the second quarter compared with the performance of the second quarter of 2015‚ Nhantsi said.

Revenue in the second quarter rose by 5%‚ with average fares 16% higher than the same period in 2015‚ though interest costs of R288m were 41% higher.

A bottom line loss of R765m was suffered compared with a budgeted R61m loss.

Foreign exchange losses for the period amounted to R592m‚ Nhantsi noted.

Earnings before interest‚ tax and amortisation of R206m was achieved‚ lower than the budgeted R221m but a better performance than the same period in 2015.

In the year to end-March SAA made a R1.5bn loss‚ an improvement on the prior year’s R5.6bn.



– TMG Digital/BusinessLIVE





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This Affirmative action made sure Black people were considered first during employment and now they are failing to deliver

2016-11-16 12:07:27.0 | 0 replies


All they need to do is hire qualified blacks not politically connected ones.

2016-11-16 12:11:09.0 | 1 replies


Is de qualified ones cause i have seen people with LLB's doing sh!t lately, e g abrahams and the gals

2016-11-16 12:12:28.0 | 1 replies


There are lot of black people who can do the job. People at SAA are employed to give out tenders to their friends and families. Siza Mzimela was doing a good job at SAA but they forced her out because she was not playing their game. Now she is running her own local airline

2016-11-16 13:43:22.0 | 1 replies


mmmmmm that is great but lately we all know what they want put in their structures

2016-11-16 15:39:03.0 | 0 replies


What do you suggest then?

2016-11-16 13:18:58.0 | 0 replies


"SAA is bleeding from the intense competition on the domestic market‚"

Eskom is heavily subsidised and are bankrupt due to inefficiency, wasteful expenditure, corruption and not due to competition. In fact if it was not for SAA there would be more airlines employing more staff and prices would be cheaper. Privatise keeping a big PIC investment as they have done with Telkom who are now profitable.

Stop bleeding the poor for a rich mans tool.

2016-11-16 13:38:10.0 | 1 replies


But air traveling is no longer for the rich in SA. SAA tickets are expensive than all other local tickets so how are are they preventing other airlines from expanding

2016-11-16 13:57:28.0 | 1 replies


The vast majority of South Africans will never have the opportunity of flying. The vast majority do not even own a car.

If SAA's tickets are more expensive and they are subsidised and bankrupt, how is it that Comair is profitable? Remove the bloated corrupt elephant (SAA), and a few competitors will replace them all in all employing more people than the presently overstaffed SAA. The same applies to other overstaffed State Owned Enterprises.Free enterprise employs more people than the State ever could plus they pay tax as opposed to sucking tax (VAT) from the poor.

2016-11-16 14:31:21.0 | 1 replies


No need to close SAA, it just needs the right people like the former Mzimela. Telkom proved that SOE can be turned around

2016-11-16 15:18:24.0 | 1 replies


Telkom was privatised. There is no way SAA in its present form can be turned around and it is arrogant to think this is possible. Bankrupt for how many years? It has no strategic value. Why keep it.

2016-11-16 15:50:06.0 | 1 replies


Government is the majority shareholder in telkom and decides who gets the ceo job. As for SAA, Mzimela was turning it around until the ANC forced her out

2016-11-16 16:02:12.0 | 1 replies


And the same should be done at SAA as I said above regarding PIC. No more overstaffing. No more jobs for incompetent pals and contracts. Let the shareprice dictate what needs changing, as happened at Telkom.

2016-11-16 16:09:57.0 | 0 replies


But lets blame the pilots... Interestingly enough, there are only 9 black pilots in South Africa, who do not work for SAA... Lets hear dudu blame white people for the lack of transformation...

2016-11-16 14:17:28.0 | 0 replies


duh....look at any airline to the same destination - SAA is ALWAYS the most expensive

am sure if not for govt related flights, their numbers will be worse!

2016-11-16 14:39:07.0 | 0 replies


?? so more airlines are making a profit which means that SAA is making a loss ?? If the other airlines can be profitable, then why can't they? SAA is consistently damn expensive, so where is all the money disappearing to?

2016-11-16 15:18:17.0 | 0 replies


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2016-11-16 15:29:54.0 | 0 replies


Get rid of the CEO of SAA. Dudu who is the close "friend" of Zuma. That is the root of the problem. Secondly, get a person from the airline industry. We are losing to Ethiopia!! Can you imagine that! Ethiopia! The ANC would sit by and see this airline go even more bancrupt, as long as they can keep stealing.

2016-11-17 12:20:30.0 | 0 replies