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The auditor general’s report noted that SAA experienced significant financial difficulty and operational challenges in the years leading to the 2018 financial year which necessitated a number of equity injections-recapitalisations from the government
SAA, South Africa’s airline continues to bleed. Audit outcomes for SAA have regressed mainly because of poor management and governance that the airline failed to establish after exiting business rescue in 2021.
According to the auditor general’s report, the national carrier presented to parliament’s standing committee on public accounts (Scopa) recently.
The report covers the four years from 2018-19 to 2021-22, after the board in 2019 requested the suspension of audits when the airline was under financial stress. The board said it wanted to focus on finding solutions to address the liquidity and solvency problems of SAA, which was put under business rescue in December 2019.
The auditor general’s report noted that SAA experienced significant financial difficulty and operational challenges in the years leading to the 2018 financial year which necessitated a number of equity injections-recapitalisations from the government. It said that from 1 April 2018 to date, the government had injected R38.1 billion, of which R27.6 billion was for post-business rescue operations.
The national carrier has since been operating on equity or bailouts and all loans were paid out through a dividend process, according to the report. The funds for the post-business rescue are meant to drive the company’s expansion plans to ensure operations can continue, but because of the failure to appoint a managerial board, the plans were not properly implemented.
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SAA is the holding company for Mango, SAA Technical, and Air Chefs. Mango was placed under business rescue in July 2021 after receiving R420 million from the 2020 medium-term budget.
