Enterprise Television- South African Airways to Scale Back in 3-Year Break-Even Bid
South African Airways is striving to return to profit in three years by reducing the size of the network and transferring planes to its low-cost carrier as Chief Executive Officer Vuyani Jarana embarks on a recovery plan.
A turnaround of the state-owned airline is among the more urgent priorities of newly appointed Finance Minister Nhlanhla Nene, who is seeking to avoid a repeat of the government bailout approved by his predecessor Malusi Gigaba last year.
However, the carrier’s net loss widened more than threefold to 5.6 billion rand ($473 million) in fiscal 2017 and the company may not be able to operate as a going concern, South Africa’s Auditor General said last week.
According to Jarana, who became SAA’s first permanent CEO in three years when he started work in November, SAA will continue to cut or reduce loss-making routes and transfer unneeded planes to profitable low-cost carrier Mango Airlines.
The airline has a fleet of more than 50 planes and flies to cities in 25 countries, according to its most recent annual report.
SAA plans to hold its annual general meeting before the end of March. A spokeswoman for the National Treasury said she couldn’t immediately comment.
SAA’s liabilities exceeded its assets by 17.8 billion rand at the end of March, according to the AG’s report.