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It’s been quite a while since the word positive was used when discussing SAA, but the national airline says it is now ‘cash positive” and planning to expand its fleet by 50% and add nine new routes.

Chief Executive Officer John Lamola said the South African flag carrier now has the cash to fund its expansion and is in a “rebuilding phase” following the COVID pandemic and failed partnership deal with the Takatso group.

The aim is now to remodel it into being a “sizeable airline that will fulfil the strategic transport needs of South Africa”. As to where the money for the ambitious plans will come from, Lamola indicated that they won’t be asking the taxpayers for more bailouts, but will be seeking sovereign guarantees to expand over the next three years.

SAA is now also collaborating with Kenyan Airways on a ‘pan-African project’ and will look to expand its routes to Frankfurt, Munich, London, and the US East Coast. The Kenyan partnership is however more aimed at ‘optimizing procurement and connectivity capabilities’, rather than an equity injection.

“As is known, SAA went through peculiar financial challenges leading to business rescue, so we are rebuilding it on a new premise and philosophy whereby cost air management is prime and whereby we are no longer dependent on the fiscus for support…”

“We are cash-positive as a company, and we are able to survive in the next 12 to 18 months on our own.”

“Our strategic position is to differentiate ourselves as a national flag-carrier to be able to offer the country the connectivity with key investment and trading partners.”

However, according to Guy Leitch, the editor of SA Flyer Magazine, he doesn’t see the ambitious plans to expand the fleet working unless SAA gets an equity partner. “They might get new old planes”, he says, “and actually are trying to get a lot of their old fleet back”.

“A, they say they’re operating profitably, although that doesn’t mean it flows all the way through to the bottom line.”

“And, B, they had  2 billion rand’s worth of operating money, capital given to them in terms of their startup budget by the State – I don’t know whether they’ve burned through that, so it gives them some decent money.”

It’s easy to be pessimistic about SAA after years of corruption, the pandemic, being grounded for 16 months and going under business rescue, but perhaps things are turning around.

SAA Interim Board Chairperson, Derek Hanekom, also recently claimed that the airline’s balance sheet is totally debt-free and the ‘new’ company has adopted a zero-tolerance policy to corruption, with the SIU investigating more than 100 cases involving SAA.

After decades of being a national joke and standing in front of the taxpayers with a begging bowl like Oliver Twist asking “Can I have some more?”, could SAA really be reaching cruising altitude?

We’ll see, but let’s not loosen our safety belts yet.

[source:ewn&biznews&capetalk]