South African Airways’ (SAA) net loss more than trebled to R5.6 billion in the 2016/17 financial year, Chief Executive Vuyani Jarana said, as officials mapped out a turn-around strategy for the struggling state airline.
SAA, which has not generated a profit since 2011, is regularly cited by rating agencies as a drain on the government’s purse. It made a loss of R1.5 billion in 2015/16.
Jarana told a news conference on Thursday that SAA expected to break even by 2021 and that it was in talks with unions about reducing staff costs.
Selling a stake in the airline to an equity partner - a long-held plan which was discussed as far back as 2016 - was about two years away, he added.
This week the head of the Treasury said selling 49% of SAA was a theoretical example of how the government could narrow the budget deficit.
Finance Minister Nhlanhla Nene told the same news conference that the turnaround strategy would include a review of the airline’s fleet and loss-making routes.
The board of the embattled national carrier says SAA is not able to take on a strategic equity partner and this is unlikely to change in the medium term.
The Democratic Alliance believes privatisation is the only way to rescue the bankrupt airline.
But board member Martin Kingston says SAA is simply not a viable investment option.
Parliament’s finance committee heard on Tuesday that the airline’s turnaround strategy is not expected to yield fruit until 2021.
The airline is forecasting a loss of R4.8 billion for the 2017/18 financial year.