SAA flying on borrowed time?

Those responsible for South African Airways (SAA) are casting around desperately for ways to save it as its financial troubles deepen.

A source said the possibility of embarking on a second round of business rescue was discussed at a recent board meeting.

However, the idea has apparently been put on ice, at least for now.

No SAA business rescue

SAA spokesperson Mphilo Dlamini denied that any board meeting had considered a return to business rescue.

But staggered salary payments and renewed government financial backing have raised new concerns about the airline’s financial position.

Last week, SAA admitted liquidity pressures forced staggered salary payments in September and October.

Dlamini blamed geopolitical disruptions, soaring aviation fuel costs and international instability for the airline’s difficulties.

“Despite the significant liquidity pressures arising from geopolitical disruptions and increased fuel costs, the airline has continued to honour its obligations to staff,” he said.

Management had intensified cost controls, reviewed expenditure and introduced closer monitoring of cash flow and liquidity.

Additional revenue-generating initiatives were also being pursued.

Dlamini defended the R1 billion government guarantee disclosed in the medium-term budget policy statement as a way to raise capital under current economic conditions.

He said shareholder support had become necessary for airlines internationally as operating costs escalated.

The guarantee is not a direct cash injection, but government could become liable should SAA default on guaranteed borrowing.

During its previous business rescue, banks recovered around R17 billion through government guarantees.

Fuel pressures

A former airline chief executive said SAA was not alone in facing fuel pressures.

“Fuel and geopolitics explain pressure, not fragility. Every airline faces them. The well-run ones watch cash constantly, forecast reliably and act early,” he said.

“Anyone who has run an airline knows cash is oxygen. You can survive losses for a while. You cannot survive running out of cash.

“When an airline has to stagger salaries, that is no longer a warning sign. It is the alarm.”

SAA’s financial recovery has come under scrutiny following disclosures in its 2025 annual report.

Its R155 million profit was supported by R1.169 billion in as set disposal gains, including the sale of a Heathrow slot, while earlier property revaluations boosted its balance sheet.

The auditor-general issued a disclaimer opinion on its financial statements.

The report also recorded a R1 billion share issue involving government, which SAA maintained was not a new bailout.

The latest guarantee came despite Transport Minister Barbara Creecy’s earlier assurances and promises by her predecessor, Pravin Gordhan, in the public enterprises portfolio that SAA no longer depended on state guarantees. National Treasury has not ruled out further assistance.

Political interference and leadership instability blamed

Leadership instability has added to the airline’s challenges.

Former CEO John Lamola’s departure was followed by acting appointments, disciplinary proceedings against former acting CEO Matshela Seshibe and his subsequent legal challenge over his exclusion from recruitment, which he later withdrew.

Organisation Undoing Tax Abuse CEO Wayne Duvenage blamed SAA’s difficulties on political interference and the absence of permanent leadership.

“It’s leaderless now. It’s rudderless,” Duvenage said.

He questioned government’s reliance on acting executives and its commitment to professional management.

Duvenage also warned government guarantees exposed taxpayers to further potential liabilities.

‘SAA cannot shrink its way to prosperity’

Dlamini confirmed receiving correspondence from the standing committee on appropriations and promised a response.

He said SAA welcomed parliamentary oversight and would explain its financial measures to improve sustainability.

Duvenage questioned why the previous business rescue had failed to produce a sustainable airline.

“Business rescue is a legal mechanism, not a strategy,” he said.

“SAA cannot shrink its way to prosperity. Cutting costs buys time; only revenue buys a future.

“That means sound network and fleet economics, sharper pricing, stronger trade and corporate relationships, and partnerships that extend reach without unnecessary capital.

“Time is not on SAA’s side. This is not a problem for next year’s annual report. It is a problem for the next payroll,” Duvenage said.