SAA – Here we go again

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Unprofitable South African Airways (SAA) could not keep going without a big state capital injection, the national airline’s executives warned yesterday. – Linda Ensor, BusinessDay

SAA is expected to post a significant loss for the year to March for the third year running because of interest payments well in excess of R300m and losses from hedging against the volatility in the fuel price.

Higher fuel costs and falling passenger numbers have also contributed to its troubles.

SAA suffered a loss of R1bn last year, and its loss was R833m the year before.

SAA chief financial officer Kaushik Patel warned that the airline’s precarious financial situation was likely to deteriorate even further as it was severely undercapitalised and burdened by debt, which exceeded its equity by 10%.

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