South African Airways (SAA) has had pretty consistent financial issues for the past 15 or so years. In 2021, the airline emerged from “business rescue” with a clean balance sheet (and as a shell of its former self), and it has sort of been chugging along ever since.
However, the airline once again seems to be in a dire situation, as a large percentage of staff aren’t being paid. It’s anyone’s guess how this plays out, though executives at the company insist everything is fine.
South African Airways downplays financial issues
South African Airways is reportedly unable to pay 30-40% of its staff at the moment, claiming it has to prioritize critical operational costs. The airline is deferring salaries of management, pilots, executives, and board members, blaming the situation in rising fuel prices.
The company’s head of corporate affairs, Mpilo Dlamini, explained that SAA has struggled with insufficient capital injections since emerging from business rescue, though insists the airline won’t seek a bailout:
“After the business rescue process, we did not get enough capital injection that is going to keep us afloat, cushion our costs, make sure that we expand the way we wanted to expand. So, there are those issues that I want to admit made us, you know, to be affected in terms of liquidity.”
“The board and the management are seized with making sure that we are actually the support that we got from government through the guarantee. We are talking and engaging a number of our financial institutions, and I must say and confirm to you now that they are willing and interested in supporting us because we have a bankable strategy. We are not going to ask for more money.”
There’s a lot of mystery surrounding the carrier’s finances
As flagged by View from the Wing, one certainly can’t help but be skeptical of all of the carrier’s financial claims. SAA’s annual financial report ending March 31, 2025, suggests that the airline group had a net profit of 155 million ZAR, or 9.3 million USD, while the airline as such had a net profit of 30 million ZAR, or 1.8 million USD.
Okay, that’s not exactly a huge profit, but at least it’s not a loss, right? Well, there’s more to the story. Before interest, tax, depreciation, and amortization, the airline group had a loss of 317 million ZAR, or 19 million USD. And the airline also had gains of 1.169 billion ZAR, or 70.1 million USD, under the asset disposal line. This could partly be attributed to selling slots at Heathrow and a lease-modification gain.
The point is, it sounds like SAA wasn’t in a great financial situation before the current crisis, and also didn’t have much of a safety net. So the current situation is only making matters worse. While the company is downplaying how dire the situation is, typically you don’t have to pay pilots late if you’re in even a remotely decent situation. It’ll be interesting to see what’s next for the airline…
Bottom line
South African Airways is struggling to pay staff on-time, with up to 40% of employees having their pay deferred. The airline is blaming higher fuel prices, which are of course impacting the entire industry. South Africa’s national carrier has received billions in bailouts over the years, and claims everything is fine, but even the past numbers don’t exactly paint a great picture of the situation. South African’s “profit” over the last fully reported financial year was due to special items and the sale of slots, rather than an actual operating profit.
It sure seems like the airline may need a bailout sooner rather than later, or else it might be looking at some real issues, since you can’t just delay payment for staff on an ongoing basis.
What do you make of this South African Airways situation?
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