SAA quietly lifts off as load factors show signs of recovery

SAA may have some good news at last, but in an unusual move the airline is keeping mum on a potentially good news story concerning its road to recovery.

Figures seen by The Citizen suggest that the state-owned airline may be on its way to recovery with a network load factor on available figures of almost 72% achieved last year and yields seemingly growing in a northerly direction.

Yet, curiously, after almost a month of queries about potentially positive developments, the airline and its PR agency, Flow Communications, are silent.

SAA silent about potentially positive developments

Based on publicly available data, which excludes additional online direct sales, SAA’s network average load factor for last year was around 72%.

According to the numbers, excluding direct and online bookings SAA carried just over 1.6 million passengers in 2024.

The Cape Town-São Paulo route emerged as the airline’s top performer with a load factor of just over 78%. Other international routes such as Johannesburg-Lagos and Johannesburg-Mauritius also performed well, with load factors of more than 77% and 82% respectively.

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The domestic picture takes on a reasonably solid shape, too. The highly competitive Cape Town-Johannesburg route achieved an average load factor of 78.6% while other local routes like Johannesburg-Port Elizabeth registered load factors around 70%, suggesting decent returns.

However, some regional legs need attention, the figures indicated. Hotly contested regional route Joburg-Harare achieved an average load in the upper 50 percentiles while J0burg-Windhoek flights struggled to reach 70%.

The hop between Abidjan and Accra is the worst of the lot with load factors rarely topping 25% despite the Johannesburg-Accra route looking healthy.

Johannesburg-Accra route looking healthy

A revenue manager at a competing airline said that at first glance the figures look good and that average fares achieved against the load factors suggested that SAA may be on the route to sustainability.

Another airline operations executive said that while SAA achieved a network average fare, with the average income per passenger of around R2 763 and between Joburg and Cape Town of around R1 500, a lot remained to be done.

The person said that while SAA may not be profitable, with those figures, it’s likely creeping close to break even.

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SAA was treading water last year after uncertainty over the carriers’ future should an equity partner not be found. Head of commercial Tebogo Tsimane said as much at an AviaDev seminar last year.

The concern came after the Takatso Consortium withdrew its offer of R51 for a majority stake in SAA along with R3 billion in working capital last year in March. At the time, Tsimane made it clear that SAA needed an investor quickly or it would face financial difficulty.

In February 2024, National Treasury reported that SAA made a loss of R771 million in its airline business and was R51 million in the red at SAA Technical.

Close to turning a corner

SAA may be close to turning a corner, but it is not free of controversy. Interim chief executive John Lamola was controversially appointed as permanent chief executive in February.

Late last year, marketing manager Carla da Silva was accused of theft of incorporeal property from her previous employer, Airlink.

Lamola has impressed some of his competitors. “He flies under the radar and has been a quiet, steady pair of hands. SAA must be credited for trying hard to perform better.”

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Collen Msibi of the department of transport said Lamola was the right man for the job and there was proof of that.

“Over the past two years, Lamola, as acting CEO, has steered SAA to conclude three years of outstanding audits and in the 2023 fiscal year to declare profits after many years of not doing so.

“His leadership has also led to the entity’s expansion to fly domestic, regional and international routes.”

Trajectory moving in a positive direction

Editor of Fly Africa magazine and aviation analyst Guy Leitch said that SAA’s trajectory is moving in a positive direction.

“The fundamentals seem to be in place. One can only hope though that the government and SAA remain true to their promise of no more bailouts.”

Wayne Duvenage of the Organisation Undoing Tax Abuse hoped the carrier was turning a corner. “SAA was in a good space before Dudu Myeni decimated it. Let’s hope it returns to positive territory,” he said.

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Beyond an end to bailouts, he wondered whether a profitable SAA would see taxpayers repaid after years of bailouts.

“Chances are though,” he said, “that SAA would want to retain profits for further investment into growth instead of repaying government for years of funding.”

Another industry insider said that the big takeaway is still that SAA might just be a political tool for some of its African routes and pointed out the loss-making route between Accra and Abidjan.

What is SAA paying for leases?

“Another big question is what is SAA paying for leases,” the analyst said.

Neither SAA nor Flow Communications responded to a question about the cost of SAA’s leases. Yet, with three recent A320 aircraft deliveries in a handful of months, others are wondering whether the airline may be expanding too fast.

Duvenage is still of the opinion that the state-owned company must be privatised. “If SAA is performing better, perhaps it will be a more attractive investment.”

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