Three years after resuming operations, South African Airways (SAA) reports sustainable growth and expansion. The national airline had entered business rescue in December 2019, just before the COVID-19 pandemic It has now made a remarkable comeback since its September 2021 relaunch.
In a recent letter to staff and stakeholders, Interim CEO Professor John Lamola shared SAA’s impressive progress.
The airline has more than doubled its route network and tripled its fleet size since its restart. Lamola proudly announced a staggering 400% growth in passenger revenues between August 2022 and August 2024.
Fleet and Network Expansion
From an initial six aircraft serving just six routes, SAA now boasts a fleet of 16 planes covering 15 destinations.
The airline has successfully reopened 11 outstations, including key international locations such as Mauritius, Perth in Australia, and São Paulo in Brazil. This expansion has also led to significant job creation, with staff numbers increasing from 500 to approximately 1,200, including 140 pilots.
Looking ahead, SAA plans to further expand its reach. November 2024 will see the launch of two new routes from its Johannesburg hub: Lubumbashi in the Democratic Republic of Congo and Dar es Salaam in Tanzania.
A Self-Sustaining Business Plan
In a recent development, President Cyril Ramaphosa transferred SAA’s shareholder responsibility to the Department of Transport. Lamola expressed enthusiasm about this change, viewing it as an opportunity for SAA to refine its focus on facilitating world-class air travel to and from South Africa.
While SAA is currently executing a self-sustaining business plan, the airline remains open to strategic partnerships to fuel future growth.
Lamola emphasized the need for continuous capital investment to maintain market share and expand operations. The airline has cultivated a positive reputation with both international and South African financial institutions, which has been crucial in rebuilding its aircraft fleet.
To support future growth, SAA is exploring various financing options. The airline possesses a substantial real estate portfolio valued at R5.5 billion and is converting surplus aircraft stock into cash. These assets provide a strong foundation for securing additional funding and strengthening the company’s balance sheet.
Financial Performance: Promising Trend
SAA’s financial performance shows promising trends. The 2022/23 financial year saw a remarkable 96% revenue growth, reaching R5.6 billion. This was followed by a further 49% increase in the 2023/24 financial year, bringing revenues to R7.3 billion.
The external audit for the 2022/23 financial results has been completed, while the audit for the year ending March 2024 is currently underway, with initial indications pointing towards a net profit.
Challenges Remain
Despite these positive developments, SAA faces ongoing challenges. Global aircraft supply constraints, stemming from the COVID-19 pandemic and production issues at aircraft manufacturers, continue to impact the airline’s operations. To address this, SAA has adopted an innovative approach, planning to wet-lease aircraft from Sun Express, a joint venture between Lufthansa and Turkish Airlines, to meet demand during the upcoming December peak season.
Summary
As SAA moves forward, it aims to strike a balance between profitability and its national mandate. The airline is positioning itself to stimulate tourism, promote trade, and drive transformation in the aviation sector, all while maintaining its commercial viability.
With its steady growth trajectory and strategic positioning, South African Airways is well on its way to reclaiming its status as a key player in both South African and international aviation.
The airline’s resurgence not only marks a significant turnaround for the company but also promises to play a crucial role in South Africa’s economic development and global connectivity.
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