South African Airways (SAA), the nation’s flag carrier, has been thrust into the spotlight once again, this time for a significant accounting error that has wiped out its reported profit for the 2023/24 financial year, casting doubt on the airline’s much-touted financial recovery. The state-owned carrier, which had celebrated a return to profitability after a decade of losses, announced on July 17, 2025, that its audited financial results revealed a loss of R354 million, a stark reversal from the initially reported profit of R60 million. The discrepancy, attributed to a R431 million accounting misstep, has raised questions about the airline’s financial governance and the sustainability of its turnaround strategy.
A Blow to SAA’s Recovery Narrative
SAA’s journey from the brink of collapse to profitability has been a cornerstone of its public narrative since emerging from business rescue in April 2021. The airline, which had not posted a profit since 2012, reported a net profit of R252 million for the 2022/23 financial year, a milestone hailed by Transport Minister Barbara Creecy and interim CEO John Lamola as evidence of the carrier’s newfound financial independence. The achievement was particularly notable given SAA’s turbulent history, marked by years of mismanagement, corruption allegations, and reliance on government bailouts totaling over R50 billion between 2007 and 2022.
However, the latest financial results, published 10 months late, have unraveled this narrative. According to reports from BusinessTech, the airline’s pre-audit financial statements had incorrectly recognized a gain of R431 million by de-recognizing business rescue credit obligations and recording the amount as sundry income. External auditors flagged this as a prior-period adjustment, forcing SAA to restate its results. The correction transformed the modest R60 million profit into a R371 million loss, later reported as R354 million after further adjustments.
The Accounting Error: A Deeper Look
The accounting error stems from the misclassification of funds related to SAA’s business rescue process, which concluded in 2021 after nearly two years of administration. During this period, the airline underwent a drastic restructuring, slashing its fleet from 44 to six aircraft, reducing staff, and refocusing operations on high-demand African routes. The R431 million in question was initially treated as income, inflating the airline’s financial performance. Auditors, however, determined that it should have been accounted for as an adjustment to prior periods, effectively erasing the reported profit.
Aviation analyst Guy Leitch, editor of SA Flyer Magazine, described the error as a symptom of deeper issues within SAA’s financial reporting. “Profit is often an accounting concept, and SAA’s history suggests that such figures can be misleading without rigorous auditing,”
The delay in publishing the 2023/24 financial statements—originally due in September 2024—further compounded skepticism. SAA has struggled with timely financial reporting since 2018, with audits for the 2019–2022 period only recently completed. The Auditor-General’s office has previously criticized SAA’s financial statements for lacking credibility, a point reiterated in a 2024 parliamentary hearing where concerns about governance and transparency were raised.
Implications for SAA’s Future
The accounting error comes at a critical juncture for SAA, which has been aggressively pursuing expansion to reclaim its status as a leading African carrier. Since resuming operations in September 2021, the airline has doubled its fleet to 18 aircraft and expanded its network to 16 routes, including long-haul flights to São Paulo, Brazil, and Perth, Australia. SAA’s leadership has outlined plans to further increase its fleet by 30% and double its route network within 18 months, with a focus on intra-African connectivity to boost trade and tourism.
However, the restated loss raises concerns about the airline’s ability to fund this ambitious growth without external support. A proposed privatization deal with the Takatso Consortium, which would have seen a 51% stake sold to private investors, collapsed in March 2024, leaving SAA wholly state-owned. While the airline is now debt-free, having cleared legacy obligations, its reliance on operational cash flow makes it vulnerable to financial missteps.
Transport Minister Barbara Creecy, who has championed SAA’s turnaround, acknowledged the setback but emphasized the airline’s broader progress. “The error is regrettable, but it does not negate the operational efficiencies achieved,” Creecy said in a statement. She noted that SAA’s revenue had surged by 183% to R5.7 billion in 2022/23, and the airline’s contribution to South Africa’s GDP was projected to triple by 2030, according to Oxford Economics Africa.
A Broader Context of Challenges
SAA’s woes are not unique in the African aviation sector, where high operating costs, currency devaluation, and inconsistent regulatory frameworks pose significant hurdles. Competitors like Ethiopian Airlines have thrived by leveraging their hub status and operational efficiency, while SAA continues to grapple with the legacy of mismanagement and political interference. The airline’s pilots’ union has also threatened a strike over a proposed 30% wage increase, which SAA claims it cannot afford, adding further strain to its financial position.
The accounting error also reignites scrutiny of SAA’s governance. The Auditor-General’s 2024 report highlighted “red flags” in the airline’s financial processes, though no clear evidence of fraud was identified. Critics, including the Organisation Undoing Tax Abuse (OUTA), have long accused SAA of opaque financial practices, a charge that gained traction during the tenure of former board chair Dudu Myeni, who was declared a delinquent director in 2020 for her role in the airline’s R16.8 billion losses between 2012 and 2017.
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