Question NW449 to the Minister of Finance
22 March 2024 - NW449
Lees, Mr RA to ask the Minister of Finance
(1)With reference to the presentation by the National Treasury to the Portfolio Committee on Finance on 14 February 2024 in which SA Airways (SAA) was reported to have traded at a loss of R761 million for the first three quarters of the 2023-24 financial year, what are the details of the sources of funds that enabled SAA to continue trading despite the losses incurred; (2) whether SAA was solvent as at the 31 December 2023; if not, what is the position in this regard; if so, what are the relevant details?
Reply:
1. SAA has cash reserves with which the airline absorbs losses incurred. Moreover, several of the expenditure items that contributed to SAA losses are non-cash items and thus would not have a direct impact on SAA’s available cash reserves. Non-cash expenses (Depreciation and Amortisation) amounted to R109 million for the first three quarters of the financial year. During the same period, SAA generated a total income of R4.4 billion which helped defray operating costs and foreign exchange losses.
2. As of 31 December 2023, SAA had Total Assets of R11.309 billion, Total Liabilities of R6.025 billion resulting in a positive equity value of R5.284 billion. The airline’s assets exceeded its liabilities and therefore the indication is that it is solvent.