South African Airways has reportedly suffered a loss of R1.4 billion ZAR after its first financial quarter, according to a leaked document.
South African Airways is yet to publish its financial results for 2014/2015, but a leaked quarterly report – as seen by Business Day – has revealed that the airline could have recently posted a R1.38 billion ZAR loss.
South African Airways has continuously posted losses since 2012; its most recent 2013/2014 financial statement revealed that the airline posted a loss of R2.55 billion ZAR; the company’s results over the past two years have not been made public.
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The airline was the beneficiary of a R14.4 billion ZAR government bailout as part of its turnaround strategy, while incumbent Minister of Finance, Pravin Gordhan, has previously warned that the airline must not become a liability.
The R1.4 billion loss – if true – is part of a larger crisis enveloping the airline. A rift between Dudu Myeni – South African Airways’ Chairperson – and Finance Minister Pravin Gordhan has placed the airline in a precarious position.
The airline requires guarantees from government to settle its debts for its 2014/2015 financial period – allegedly to the figure of R5 billion ZAR – which Gordhan has declined to provide until a new board is put in place.
Myeni has been accused of mismanagement and nepotism while the airline has, in recent years, been stricken by corruption scandals.
The news, if accurate, forms part of a string of financial disappointments as the airline continues to flounder. Several low-cost airlines have risen to challenge domestic routes within the country in the interval period.
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What are your thoughts on South African Airway’s reported loss? Is there any hope for the airline? Be sure to let us know your opinion in the comments below!
Follow Bryan Smith on Twitter: @bryansmithSA
Source: BusinessTech
