Cash-strapped state airline South African Airways (SAA) yesterday said it remained optimistic about the future and its board and management were taking urgent steps to address a damning report from the auditor-general’s office.
Last week, Auditor-General Kimi Makwetu tabled his report in parliament – after SAA failed to meet a deadline to release its annual report and financial statements – which showed that SAA posted a net loss of R5.6 billion for the 2016-17 financial year, worse than the R1.5 billion loss suffered during 2015-16.
SAA chief executive Vuyani Jarana said the national carrier had noted and accepted the AG’s report. Jarana said the majority of the airline’s operations were sound and it was building on this to break the loss-making cycle and transform into a viable and sustainable entity.
“The board has developed and approved a strategy and five-year plan to turn the airline around and we are working closely with the board and shareholder to ensure we succeed,” Jarana said.
“SAA has had many previous turnaround strategies which have not been implemented before. This time it is different: we believe the vision outlined by the board is absolutely correct, and are committed to ensuring it is put into practice.
“We need a clean break with the past and a new approach to the future, and that is precisely what we are doing. We are acting with urgency to ensure the viability and sustainability of this crucial national asset.”
Makwetu said significant deficiencies in internal controls formed the basis for his qualified audit opinion. His report detailed a lack of proper record-keeping and systems to ensure accurate financial statements and a failure to take effective steps to prevent wasteful and fruitless expenditure.
Makwetu also pointed to procurement irregularities and said he could not find enough evidence to show some contracts were legally awarded.