SAA’s profit mirage exposed as bailout disguised as share capital
· Citizen
South African Airways (SAA) received a quiet government bailout of more than R1 billion in the 2024-25 financial year, contributing to its healthy profit announcement.
The injection was in the form of the issuing of new shares to the airline’s sole shareholder, the South African government.
Visit asg-reflektory.pl for more information.
However, the department of transport, under whose aegis SAA falls, denies that the money was a bailout, insisting that the airline has received no state funding since 2023.
SAA’s reported profits are bolstered by gov support
Economist Dawie Roodt called out the government’s wordplay.
“It’s semantics trying to disguise a bailout as share capital. Why do businesses sell shares and dilute shareholding?” he said. “It’s to raise money. It’s as simple as that.”
Also, after stripping away the sale of assets and spin, the stateowned airline is still precariously close to the same cliff edge it teetered on before business rescue in 2019.
This was the second year that SAA presented its results through its own rose-tinted glasses. In 2023, SAA managed to achieve a gigantic property revaluation gain of R3.784 billion, significantly inflating the value of assets on its balance sheet.
In 2024, during the period under review, the state, as SAA’s only shareholder, injected about a further R1 billion into the airline as share capital. It reads like a bailout but a denial from Transport Minister Barbara Creecy’s office noted that SAA last received funding from the state in April 2023.
Transport dept says last bailout happened in April 2023
Spokesperson Collen Msibi said that “it must therefore be noted that the National Treasury has not given any money to SAA since Creecy took office”. Aviation analyst Guy Leitch said he had expected more from the airline’s results.
“I was honestly expecting something better and more positive from SAA,” he said.
An aviation analyst told The Citizen they question whether the smoke and mirrors applied in the annual report tried to hide the extraordinary lengths that the airline had to go to, during the two financial periods, just to stay afloat.
SAA presented its 2025 annual report as evidence of a recovery. Yet a closer look at the document suggests the national carrier’s well publicised return to profit may have been somewhat romanticised by the carrier.
The airline’s success during the year in review seems to have its foundation in asset sales, state support and accounting interventions, and not particularly reliant on the underlying strength of its airline business.
Airline reported R155m profit
The airline reported a profit for the year of R155 million and an operating profit of R336 million, alongside revenue of R9.266 billion. SAA noted rising passenger volumes, route growth and an improved load factor as signs that the business was regaining altitude after years of turbulence.
But the same annual report shows that the result was materially influenced by a R1.169 billion gain on the disposal of property, aircraft, equipment and intangible assets. Strip that out, and the picture becomes far less of an aviation romance with South African taxpayers.
ALSO READ: Flying could become unaffordable as jet fuel prices jump by 70%
Simply put, SAA’s reported profitability in 2025 was not driven by flying passengers but propped up by selling off assets, including one of its prized Heathrow slots.
Without selling off assets, SAA’s position would have moved the needle backwards from a reported profit before tax of R173 million to an underlying pretax loss of roughly R996 million, not dissimilar to the edge-of-cliff position that the airline had previously found itself in.
According to the annual report, the sale of assets had to happen after the collapse of the Takatso deal, led by the PIC Harith investment group that’s now courting FlySafair.
AG questions credibility of report
The credibility of the report was also questioned by the auditor-general. Instead of signing off the numbers cleanly, or even with a qualified audit, it issued a disclaimer opinion on SAA’s 2025 financial statements.
“That is among the worst audit outcomes a public entity can receive,” the analyst said. “It means the auditor could not obtain sufficient appropriate audit evidence to form an opinion on the figures presented.”
Auditor-general Tsakani Maluleke was unable to verify key balances, disclosures and the consolidation of some subsidiaries. In other words, even as SAA celebrated a return to profit, the public has been told by the country’s top audit authority that the books themselves could not be relied on in the normal way.
Outa chief executive Wayne Duvenage said the report raised serious concerns about governance, accountability and whether the airline’s leadership had learned from SAA’s long history of failure and repeated lifelines.
“In this day and age of SAA’s history of failure and lifelines, it amazes me that we still have question marks around their financial reporting and matters of governance,” he said.
Outa raises serious concerns
“For SAA to still receive a disclaimed audit outcome is a serious concern. One would think the executive and non-executive directors would by now have covered all the governance bases and ensured that reporting is accurate.”
Duvenage said SAA’s disclosure of more than R500 million in irregular expenditure, coupled with the absence of the necessary investigation reports, was “nothing short of irresponsible”.
He also said it was troubling the airline itself acknowledged that sustainable positive operating cash flow would require higher load factors and yields.
“This is a fundamental operational factor in the airline industry and I’m afraid that one isn’t confident that current management really understand or drive this discipline into the airline’s management culture,” he said.
“As we have said in the past, the government must get out of these complex and highly competitive businesses and sell off a majority shareholding to private industry players.”
Operational data
SAA’s operational data shows that while the airline carried more passengers and improved its load factor to 65%, it also showed a negative airline ebitda of R443 million against a target of positive R241 million.
Meanwhile, chief executive John Lamola was rewarded with a 23% pay boost to R4.7 million. Other executives were also thanked with increases that ranged from 23-36%.
NOW READ: SOEs strike out as SAA leads the pack