SAA annual financial statements revealed — R23.5 billion in losses
SAA’s annual financial statements for the past four years have finally been revealed, painting a dismal picture of the airline.
The statements were presented on Friday after Public Enterprises Minister Pravin Gordhan sent a letter to the speakers of the National Assembly and National Council of Provinces (NCOP) confirming that he could finally table them.
The reports show that over the four years, SAA incurred a combined R23.5 billion in losses, reports the Sunday Times.
This includes before-tax losses of R6.5 billion in 2018/19, R5.7 billion in 2019/20, R7.6 billion in 2020/21, and R3.7 billion in 2021/22.
Among the more notable revelations were the following:
- Accommodation and refreshment costs exceeded R1 billion in 2018/19 and 2019/20, but were contained to under R35 million in the next two years.
- Fuel and other energy costs reached R8 billion in 2019/20, before falling to R369 million in 2021/22.
- Airline revenue dropped from R23.2 billion in 2020, to R2.3 billion in 2021.
- Auditor-general Tsakani Maluleke said she did not receive enough evidence that steps were taken against officials who were responsible for the irregular expenditure of R37.7 billion in 2022 – up from R32.6 billion in 2021.
- Mango did not keep sufficient audit evidence for Maluleke to audit its airline revenue.
Despite the findings, SAA interim chair Derek Hanekom and interim CEO John Lamola said in the airline’s 2022 annual report that SAA was in a positive equity position.
“The directors are satisfied that SAA can continue to operate as a going concern. The consolidated annual financial statements were therefore prepared on this basis,” they said.
Pravin Gordhan, Minister of Public Enterprises.
Corruption at SAA
Special Investigating Unit (SIU) head Andy Mothibi recently revealed the extent of corruption at SAA over the past decade.
Presenting in front of Parliament’s Standing Committee on Public Accounts (Scopa), Mothibi said there are 24 allegations of corruption at SAA that the SIU is investigating.
Among the allegations being investigated by the SIU are:
- R375 million tyre tender — SAA issued a tender to purchase tyres for between R218 million and R375 million, but it did not comply with the Public Finance Management Act (PFMA) and appropriate procedures.
- R1.8 billion component support services contract — Multiple irregularities and corrupt relationships have been found between SAA employees, board members, and third parties relating to a contract worth up to R1.8 billion. Over R1 billion is expected to be recovered after litigation.
- R953 million security services contract — A security contract was irregularly awarded and then extended eight times between February 2008 and January 2020. The SIU expects to recover funds and issue criminal referrals.
- R85 million catering services tender — After the SAA board chairperson instructed a R85 million tender for catering services be cancelled, it was then awarded to an SAA subsidiary without going through a new tender process.
Andy Mothibi, Special Investigating Unit (SIU) head
As of 21 November, only R14 million had been recovered by the SIU, although the expectation is that the SIU will eventually recover approximately R3.4 billion.
However, it is expected to take some time to recover this money, particularly given that the SIU has recently received fresh allegations it is investigating.
Furthermore, Mothibi said it is difficult to investigate many of them as retrenched employees often did not hand over critical documents.
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