SAA’s finances under fire as cash squeeze tightens
Parliament’s standing committee on appropriations (Scoa) has requested a report on embattled state carrier South African Airways’s (SAA) financial and cash position, in the same week the airline notified staff of salary delays for the second consecutive month.
The Sunday Times has seen a letter — dated October 19, just two days before finance minister Enoch Godongwana revealed that government had provided a lifeline for the airline through a billion-rand guarantee — in which Scopa chair Mmusi Maimane informs transport minister Barbara Creecy of a report from SAA employees raising “serious allegations about executive appointments and the accuracy of SAA’s financial position”.
Maimane says in his letter: “Although these allegations are untested and the committee draws no conclusion from them, we do however deem it necessary to request an urgent update on SAA’s current financial and cash position, including the 2025/26 audit.”
He asks Creecy to prepare an update or report by October 30 covering:
- SAA’s current financial and cash position;
- How the proceeds from the sale of a slot at London’s Heathrow Airport — about R1.1bn — were used;
- Any anticipated request for state support; and
- Any update on steps taken to investigate the concerns raised.
Maimane’s letter came a few days before SAA acting chief human capital officer Lourens Erasmus issued a communication to staff informing them that salaries would be staggered, with ground staff and cabin crew to be paid on October 27 and executives on October 31. Pilots would be paid on October 28, and management and specialists on October 30.
“SAA apologises for any inconvenience caused and appreciates employees’ understanding. Employees who require a letter for submission to their bank confirming the revised salary payment date may request one from their HRBP [human resources business partner],” the internal memo said.
This was the second time the airline has delayed salaries, said an insider with intimate knowledge of the situation who did not have permission to speak to the media.
SAA is running out of money, and may soon be grounded — Source
Last month’s salaries were only paid around October 2, the source claimed, adding that the financial difficulties extended beyond salaries. Some service providers now demand prepayment, and the airline is operating only through bank credits.
“SAA is running out of money, and may soon be grounded,” the source alleged.
On Friday, Maimane said he was concerned about SAA’s financial position, referring to the controversial R155m profit declaration the airline made in February, despite the auditor-general having issued a disclaimed audit opinion.
“The reason I’m asking formally is because we need to interrogate the authenticity of SAA’s finances. The auditor-general raised a question about the integrity [of the financials], and part of the allegations is that there is a misrepresentation of SAA’s financial reporting, and we need to deal with that,“ he said.
The airline’s financial position contrasts sharply with its circumstances when it relaunched after business rescue in September 2021. At the time, after the state had spent R38bn settling its old debt during business rescue, the airline started with R2.5bn in working capital and no debt.
However, regaining markets lost during its year-and-a-half business rescue process has proved difficult. The airline reported a R350m loss at the end of March 2024. In February, it announced a R155m profit for the year ending March 2025, but its accounts showed that revenue from operations, at R9.26bn, was lower than its operating costs of R9.58bn.
It subsequently emerged that the airline had received more than R1bn in government support through a transaction structured as a share buyout.
In the past financial year, SAA generated a further R1.1bn from the sale of one of its two slots at London’s Heathrow Airport.
Two sources with direct knowledge of SAA’s financial situation said the airline had initially committed to using the proceeds to expand its fleet from 16 to 21 aircraft and increase its routes.
One source said the proceeds from the sale of the slot were diverted to cover operational losses after SAA’s initial financial projections proved unreliable. The insider claimed that in February 2025, the airline had projected a R500m profit on revenue of R9.9bn, but ended the year with an R800m loss — a negative turnaround of R1.3bn.
Concerns were raised internally that an unrealistic revenue budget of R14.5bn for the following year — coupled with delayed aircraft arrivals and rising costs — placed the airline at risk of bankruptcy.
On Friday, SAA issued a media statement in response to these developments, affirming its commitment to operational sustainability and addressing its financial position.
“The global aviation industry is operating in an increasingly volatile environment, shaped by geopolitical tensions, international disruptions and sharply rising operating costs, particularly aviation fuel,” SAA spokesperson Mphilo Dlamini said.
“These pressures are affecting airlines worldwide by constraining margins, liquidity and the cost of maintaining reliable air services. In response, airlines are reassessing financial assumptions, adapting operating strategies and strengthening measures to withstand external economic shocks.
“Against this backdrop, SAA reaffirms its commitment to operational sustainability, responsible financial management and the wellbeing of its employees.”
On the staggered salaries, Dlamini said: “SAA recognises that its employees are central to the airline’s operations, recovery and future success, and takes its obligations to them extremely seriously.
“Despite the significant liquidity pressures arising from geopolitical disruptions and increased fuel costs, the airline has continued to honour its obligations to staff. These pressures necessitated the staggered payment of salaries for the first time in September and now in October.
“These measures were taken to manage the airline’s sustainability and ensure that it can continue operating while meeting its obligations.”
Dlamini confirmed receipt of the letter from Scoa, saying SAA “is giving the matters raised the necessary attention and the airline will provide a comprehensive response”.
“SAA will engage with Scoa openly and constructively to provide the necessary context on the challenging global operating environment, the financial pressures confronting the business and the measures being implemented by the board and management.”
On state support and funding, the airline said: “In SAA’s case, the R1bn government guarantee has served as a mechanism through which the airline can raise capital to fund its business requirements under the current geopolitical challenges and prevailing aviation fuel hike.”
There’s a solid case to be made for having a state-owned airline. For starters, it stops a whole lot of money being exported — Guy Leitch, aviation analyst
Aviation analyst Guy Leitch said SAA’s financial difficulties reflect a multiyear decline rather than a sudden spiral.
SAA remains fundamentally undercapitalised and underskilled, with overheads that were too high relative to revenue and intense competition on previously profitable regional routes. He characterised recent state support and share transactions as debt-raising exercises to cover ongoing working capital losses.
“There’s a solid case to be made for having a state-owned airline. For starters, it stops a whole lot of money being exported. If you buy tickets to Europe on Emirates, the entire proceeds of that ticket are exported, and all the benefits occur outside the country.
“And then there are all the other developmental aspects in terms of creating highly skilled jobs.”
He said an airline is a difficult enterprises to run, with immense skill and capital requirements, and margins that are extremely thin.
“So you cannot have any inefficiencies, you cannot have senior management who don’t know what they’re doing and hope to compete; yet that is what the government continues to do with SAA.”
