South African Airways (SAA) is set to launch new routes from Johannesburg to Lubumbashi, Democratic Republic of the Congo, and Dar es Salaam, Tanzania, in November, marking another step in the airline’s strategic expansion. This announcement comes as SAA reports steady growth three years after resuming operations.
Fleet Expansion and Revenue Growth
Interim CEO, Professor John Lamola, highlighted the airline’s remarkable progress since its post-pandemic relaunch. Between August 2022 and August 2024, SAA expanded its fleet from six to 16 aircraft and increased its route network from six to 15. This growth led to a 400% increase in passenger revenue during the period.
“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,” said Lamola, showcasing SAA’s strategic recovery and operational ramp-up.
Financial Recovery and Reporting Delays
Since restarting operations in September 2021, SAA has experienced steady revenue growth. For the 2022/23 financial year, revenue surged by 96% to R5.6 billion, up from R2 billion in the previous year, based on an initial fleet of six aircraft serving six routes. However, SAA has faced delays in publishing its official 2022/23 financial results due to a disagreement with the Auditor General over the treatment of revenue from expired air tickets. The airline has since completed the external audit for the 2022/23 financial year and is currently undergoing an audit for the year ending March 2024. All indications suggest that the airline will report a net profit for the 2024 financial year.
For the 2023/24 financial year, SAA’s revenue increased by 49% to R7.3 billion, following an increase in fleet capacity to 13 aircraft. This underscores the airline’s commitment to its recovery strategy, which focuses on expanding its network, optimizing operations, and enhancing customer service.
Industry Constraints and Operational Challenges
Despite its progress, SAA faces constraints stemming from the global supply chain disruptions caused by the pandemic and production issues at major aircraft manufacturers. The delivery of three additional aircraft, initially expected in the previous calendar year, has been delayed. To address this shortfall, SAA plans to utilize wet-leased aircraft from Sun Express (owned by Lufthansa and Turkish Airlines) during the upcoming December peak season.
Government Oversight and Future Growth Plans
In a move to streamline government oversight, President Cyril Ramaphosa recently assigned shareholder responsibility for SAA to the national Department of Transport, under Minister Barbara Creecy. Professor Lamola confirmed that the airline’s leadership has already met with the minister to discuss SAA’s current state and its medium- and long-term strategies.
SAA is currently executing a business plan designed to ensure profitability through revenue generated from its operations. The airline’s future growth may involve seeking a strategic equity partner, a decision that remains under the purview of the shareholder. Lamola noted that SAA would require capital investment and is exploring various financing options to support further expansion and enhance customer service.
“Over the last three years, SAA has managed to cultivate a positive reputation with both international and South African financial institutions, hence the success in rebuilding our aircraft fleet. We are building on this favorable creditworthiness to strengthen the company’s balance sheet,” Lamola added.
Strategic Asset Management and Financial Stability
To support its financial stability and future growth, SAA is exploring ways to leverage its assets. The airline has a real estate portfolio valued at R5.5 billion and a surplus of aircraft stock, which it plans to convert into cash. This strategic approach to asset management is part of SAA’s broader effort to unlock funding options and build a stronger, more resilient airline
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