Cape Town — South African Airways (SAA) has left the door open for another strategic equity partner after the deal with Takatso Consortium collapsed earlier this year.
Former Minister of Public Enterprises, Pravin Gordhan, revealed that the deal with Takatso was called off due to several reasons which included fair value attached to the shares, public interest and that SAA was in a stronger position than it was in 2019 when talks first took place.
In a statement, SAA’s interim CEO, John Lamola, told staff and the stakeholder community that the airline was executing a business plan where it was thriving due to revenues created from operations. He said the question over whether SAA would look for another strategic equity partnership was down to the shareholder.
“As with any airline, SAA’s growth and defence of market share will require continuous capital investment. Therefore, it is part of our job to investigate financing options to fund further expansion and the elevation of our customer service,” Lamola said.
He added that SAA has managed to cultivate a good reputation with local and international financial institutions, leading to a rebuild of its aircraft fleets. He said there are also a range of assets that can be leveraged to unlock future funding options, with SAA’s real estate recently valued at R5.5 billion.
South African Airways continues to report steady, sustainable growth three years after returning to the skies. ✈🇿🇦
“The airline has more than doubled its route network and tripled its fleet size. We are proud that between August 2022 and August 2024, we have grown the airline… pic.twitter.com/Jgo4IWpwcy
— SAA – South Africa (@flysaa) September 11, 2024
Lamola also revealed that SAA has been on an upward trajectory since its return to the skies three years ago. When it started operations following an 18-month hiatus, SAA returned with just six aircrafts and six air routes. He revealed that it has doubled its route network and tripled its fleet size.
“We are proud that between August 2022 and August 2024, we have grown the airline to 16 aircraft flying 15 routes, with a 400% growth in passenger revenues during that period,” he said.
“To date, we have reopened 11 outstations, including Mauritius, Perth in Australia, and São Paulo in Brazil. Post-Covid, our employment offering has expanded from 500 to around 1 200 staff, including 140 pilots,” he added, with two more routes scheduled to Lubumbashi in the DRC and Dar es Salaam in Tanzania from Johannesburg.
A return to operations means that SAA has experienced a rapid rise in revenue growth since September 2021. For the 2022/23 financial year, SAA revenue grew by 96%, (R5.6 billion) from R2 billion in the previous year. For the 2023/24 financial year, the airline revenue increased by a further 49% (R7.3 billion) owing to fleet capacity reaching 13 aircraft.
Lamola also announced that President Cyril Ramaphosa assigned shareholder responsibility for SAA to be a member of the state-owned transport infrastructure entities. He said SAA met with Minister of Transport, Barbara Creecy, to discuss medium and long-term goals.
Lamola said SAA’s growth strategy aims to ensure that the airline attains profitability whilst funding itself from its operations and pursuing award-winning service to its customers.
SAA is now positioned to embrace its national developmental mandate of stimulating tourism, and trade, and driving of transformation in the aviation sector, without compromising its commercial viability.
#GOOD_TO_KNOW | @flysaa South African Airways Approaches Profitability After Three Years of Growth
On Tuesday, September 10, 2024, South African Airways (SAA) provided an update on its financial status, three years after the relaunch of its operations.⤵ pic.twitter.com/MaPCTMLkJ5
— NewsAero Africa – EN (@NewsaeroEn) September 11, 2024
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Compiled by Matthew Petersen
