SAA to downsize and expected to cut fleet by 20 per cent

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This topic contains 21 replies, has 7 voices, and was last updated by  capetonianm 29 Nov 2017
at 17:24
.

Viewing 10 posts - 16 through 25 (of 25 total)

  • openfly
    Participant

    It is only a few weeks ago that the South African government handed SAA another R13,000,000,000 to keep it flying. The local financial press in SA are suggesting that the airline needs even more now…SAA have asked for another R5,000,000,000!


    SimonS1
    Participant

    capetonianm Participant >> This reply has been reported for inappropriate content. >>

      Easy come, easy go. That ‘government’ money is taxpayers’ money. South Africa has one of the narrowest tax bases in the world, with less than 25% of the population registered as taxpayers. Of those, less than half actually pay tax. Roughly 2% of the population pay over 50% of total tax collection. Not to mention VAT and other taxes on expenditure.

    Might I ask why? Is this is a mistake, or some snowflake objecting to the truth about ‘democracy’ in South Africa?

    I thought that ridiculous ‘report’ button would have been removed in the last update.

    Does SA have any leadership at present….I heard Tony Gupta was keeping a low profile these days and Zuma facing corruption charges.


    AMcWhirter
    Participant

    SAA’s new CEO Vuyani Jarana says the airline is seeking an equity investor to revive the carrier’s fortunes. Report from Bloomberg

    https://www.bloomberg.com/news/articles/2017-11-06/south-african-airways-seeks-investor-to-revive-its-fortunes


    capetonianm
    Participant

    Don’t all rush, gentlemen!


    openfly
    Participant

    I thought that SAA had found a suitable investor…..the South African government. After all they have already given R13,000,000,000 in the last few months and are about to donate another R5,000,000,000 into the SAA coffers.


    capetonianm
    Participant

    Sorry, openfly, but I must correct your statement above.

    I thought that SAA had found a suitable investor…..the South African taxpayer. After all they have already given R13,000,000,000 in the last few months and are about to donate another R5,000,000,000 into the SAA coffers.

    There aren’t that many taxpayers, ZA has one of the narrowest tax bases in the world. So we have a situation where the (mostly) white taxpayers are paying for the thugs and buddies of Zuma and the ANC to fly for free and to give high status jobs to the incompetent, thus creating an ever worsening situation and a descent into the maelstrom.


    LuganoPirate
    Participant

    Latest I heard today was the government will sell part of its stake in Telkom to provide the funds to keep SAA flying. I also saw this but admittedly it’s a few years old so may be different now:

    We take note that the “research” was not conducted in any depth and some of the numbers below reflect from 2010 ­ 2012, so it is not conclusive. But here is what he found:
    1) QANTAS (Australian): 32,500 employees with a total of 252 aircraft = 129 employees per aircraft
    2) American Airlines: 87, 897 employees with a total of 618 aircraft = 142 employees per aircraft
    3) Delta Airlines: 106,216 employees with a total of 722 aircraft = 147 employees per aircraft
    4) British Airways: 36,832 employees with a total of 238 aircraft = 154 employees per aircraft
    5) United Airlines: 115,149 employees with a total of 710 aircraft = 162 employees per aircraft
    6) South African Airways: 55,500 employees with a total of 58 aircraft = 957 employees per aircraft

    Perhaps they need Alex Cruz to come and run it for them?


    openfly
    Participant

    @capetonianm In fact, I am one of the 2% who pay SA taxes. Do I own part of SAA…I do hope not. ?


    LuganoPirate
    Participant

    @capetonianm In fact, I am one of the 2% who pay SA taxes. Do I own part of SAA…I do hope not. ?

    So am I unfortunately. When and if I fly them again I shall remind the oft stroppy hostess that I have an equity stake in the airline and they better treat me with more respect 😉


    capetonianm
    Participant

    This reply has been reported for inappropriate content.

    https://www.businesslive.co.za/bd/companies/transport-and-tourism/2017-11-29-saa-projects-r4bn-loss-by-end-march–worse-than-projected/

    SAA’s new R4bn loss forecast is much worse than its turnaround plan projected
    Of the R10bn state recapitalisation, R7.6bn would be used to repay loans, but SAA will still have outstanding debt of R9.74bn by April 2018

    State-owned national airline South African Airways (SAA) is projecting a loss of R4bn for the financial year to end-March 2018, chief financial officer Phumeza Nhantsi said on Wednesday.

    This was much worse than the R2.8bn loss projected in the five-year turnaround plan. The loss is mainly due to the costs associated with exiting from leasing five narrow-bodied aircraft.

    By end-September 2017, the loss for the year to date was R2.1bn, up from the projected R1.8bn. Revenue came in at R14.5bn, lower than the budged R15.4bn.

    In her briefing to Parliament’s standing committee of finance, Nhantsi said revenue shortfall in the year to end-September was R879m, about R450m of which was from the domestic market where SAA was facing stiff competition from low-cost carriers.

    Operating costs were in line with the budget while maintenance costs had exceeded the budget by R300m and finance costs — related to the recapitalisation — had been reduced by R141m. An unanticipated amount of R300m had to be paid for the exit from the aforementioned leases.

    Of the R10bn recapitalisation by the state, R7.6bn would be used to repay loans, thereby reducing the interest bill. Nhantsi said the recapitalisation would allow SAA to reduce its finance costs by about R600m for a full a year.

    She said SAA had managed to reschedule loans that expired last week until end-March and, therefore, the airline would pass the going-concern test required for the Auditor-General to finalise the financial statements. The SAA annual general meeting could, therefore, go ahead on January 19.

    In terms of the conditions attached by the government to the recapitalisation, SAA is required to submit a board-approved, five-year turnaround plan to Treasury, as well as identify which non-core assets could possibly be sold.

    The airline will also have to submit an action plan to address the findings from all independent forensic investigations by the end of December. The plan will have to be implemented by the board by end-March 2018. In addition, the airline will have to provide Treasury with a framework for the commencement and cessation of routes by end-January.

    Newly appointed CEO Vuyani Jarana said even with a R10bn recapitalisation, SAA would remain under-capitalised with a negative equity position of about R9bn by the end of the year. By the end of April 2018, SAA forecasts it will have outstanding debt of R9.74bn.

    Jarana said the biggest challenges facing the airline were its capital structure and its commercial strategy. If these could be fixed, SAA would be able to get back on its feet. He stressed the need for stability to be restored to SAA, which has a new board. A chief restructuring officer Peter Davis — a known aviation restructuring expert — has been employed to work closely with Jarana.

    Entirely predictable under the current circumstances where you have thieving at all levels in the airline, just as in the government. It all starts at the top and filters down.

    Sad but true, this is what the west appears to have wanted from the ‘democratic’ government which was meant to have improved conditions for black South Africans. Most are worse off now under the charade of ‘democracy’ than before 1994, but the elections were ‘free and fair’, just like the ones in Zimbabwe, and look what happened to Robbing Mugabe.

    No doubt someone will flag this post for ‘inappropriate content’, (i.e. the truth.)

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