SAA clears runway of losses as it returns to profit

You can also listen to this podcast on iono.fm here.

JIMMY MOYAHA: South African Airways (SAA) recently released its full-year set of results, the business returning to profit after having a loss-making year – a profit to the tune of R155 million for the year ending March 2025. This is, of course, following a R354 million loss in the previous financial year.

For more on this, I’m joined on the line by SAA’s chief executive officer, Professor John Lamola, to look at the numbers and see what we make of them.

Prof, always lovely having you on the show. Always lovely chatting to you about the performance of the business. Thanks so much for taking the time. Let’s perhaps start with an overview of the year that was. Understandably, of course, this conversation that we’re having precedes the tabling of the results that will take place in Parliament, I imagine, in a couple of days’ time. But give us a sense of the performance from a business perspective?

JOHN LAMOLA: Thanks for having me. The most important thing is that South Africa as a nation has an airline that we can all continue to be proud of, and which we trust will grow from strength to strength, growing to financial sustainability.

The period under review, Jimmy, is the year that ended in March 2025, which was very tumultuous and difficult for South African Airways.

As you will recall, among other things in December 2024 we had a pilot strike. It was also a year during which the whole global aviation industry was adjusting to the volatility of the jet fuel prices because of the instabilities surrounding the Ukraine conflict.

But we are glad that we were able to scrape through and make a very modest profit with R155 million recorded. But most importantly [we had] a positive operating profit as well.

But allow me to say that with SAA’s growth, one of our biggest challenges is to ensure that we have robust governance systems in the company, and that we will also improve our audit outcomes, as the company is now dependent on its own operations for funding.

And we are challenged to have a set of financials that will be credible to the funders that we are now forced to approach in the private sector.

JIMMY MOYAHA: Prof, can we look at the operations of the airline? We know that in the previous year approval was granted to expand the fleet of aircraft. Can you give us a sense of where we stand from an SAA perspective on aircraft, on routes? We know that a couple of new routes were added and some old routes brought back. Just give us a sense of where the business stands now.

JOHN LAMOLA: Yes. We started in 2021 with only six aircraft. Since the end of December we have been flying 21 aircraft, five of which are wide-body aircraft. And we were able during the year under review for 2025 to add our intercontinental route to São Paulo, which has been a very successful route for us. And in this past calendar year we launched Lubumbashi (DRC) as well as Gaborone (Botswana) as well as a very exciting route, which is the connection between Cape Town and Mauritius.

All in all, we now are operating 17 routes into West Africa as far as Abidjan (Côte d’Ivoire) and we are working on plans to stabilise our operations so that we can offer better customer service.

Elevation of our customer experience we have identified as a competitive edge that we need to focus on. So we are no longer chasing just expanding our routes or getting more aircraft. The focus of SAA now is to stabilise our operations and to make sure that we make good with what we have.

JIMMY MOYAHA: Prof, can we take a look at the competition in a bit more detail? Yesterday we got confirmation that Harith General Partners had announced that they would be purchasing Fly Safair. I want to look at that in the context of local competition. But I also want to look at where SAA stands on the African continent. At one stage South African Airlines was the largest airline on the African continent and today that position is held by Ethiopian Airlines. But I can imagine from our side the ambition is to return to that top spot. No?

Listen: Harith set to take off as FlySafair’s new owner

JOHN LAMOLA: Not necessarily. South African Airways has been resized and repositioned. Remember, South African Airways pre-Covid was a giant that was growing – but fuelled mainly by taxpayers’ money. The SAA that we have now is totally different and, during SAA’s grounding throughout Covid and its business rescue, the aviation landscape has changed dramatically in South Africa.

You had small private airlines growing into major operators. But in the domestic industry we have managed to grow our market share during the past 12 months.

We were holding a paltry 10% market share last year. Now we are holding a 22% market share, and we have taken that 10% market share from, of course, the dominant player in the market, which was at 71% last year and currently is at 61%.

But South African Airways is different. So we are not – and we don’t see ourselves – necessarily [as] a local competitor. The legislative mandate for SAA is to connect South Africa with its global investment, economic and tourist destinations and partnerships.

So SAA is modelled to be an intercontinental airline that flies long-haul, wide-body aircraft. We are the only airline that has A340s and A330s. So as such we see ourselves as using our local market to feed into our broader international network.

We are a member of Star Alliance. Star Alliance consists of about 25 leading airlines in the world, with whom we share the flow of passengers. So SAA is unique, even though perceptually we are benchmarking ourselves with our local players.

JIMMY MOYAHA: Prof, before I let you go, I want to come back to that governance point that you touched on, saying it’s a key focal area for SAA to ensure that all those points are met and adhered to. I want to look at the numbers. Of course, we are set to see more details around those numbers when the official report is tabled in front of Parliament.

However, SAA has failed to provide the South African public with an unqualified set of financials in almost a decade, if not more. Are we saying that those sorts of concerns around some of the misstatements, some of the unexplained numbers – all of that is being attended to and we can expect … to start to get more unqualified reports going forward from the business?

JOHN LAMOLA: Two points. First, the answer is definitely [for the] SAA that has emerged post business rescue. Currently, as we have noted, we have had a new board since August, a board which is totally committed to ensuring that SAA improves its audit outcomes.

However, the biggest challenge – which South Africa must still get into a debate and conversation about – is the question of whether the Public Finance Management Act, under which South African Airways is governed, as well as the extra-rigorous audit supervision that the Auditor-General of South Africa exerts on state-owned entities and government departments, whether that kind of elevated compliance requirement is appropriate for an airline which is not a monopoly like the other state-owned entity, and which is operating in a very competitive environment where some level of agility that at times it is forced into – of course with all the ethics being insisted upon – can balance that agility and the achievement of a profitable airline?

That’s a debate that we’ll have to have in the near future. But for now, SAA management and the board have been enjoined to drive towards clean audits.

JIMMY MOYAHA: South African Airways is returning to profit and focusing on governance and a leaner business going into the future.

We will leave the conversation on that note. Thanks, as always, to Professor John Lamola, the chief executive at South African Airways, for joining to look at that performance.

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.