The airline sector has seen a renaissance with South African Airways (SAA) emerging from the rescue process in 2021. The popular national carrier, after years of financial difficulties, has turned a profit for the first time in over a decade. With a net profit of R252 million for the 2022-23 financial year and a turnover of R5.7 billion, SAA has performed remarkably well with only six to eight aircraft in service.
This dramatic turnaround is accompanied by an even more encouraging projection for the local economy. A study by economic analyst firm Oxford Economics Africa estimates that SAA expects to contribute R9.1 billion to the local economy in the 2023-24 financial year, a figure that is expected to rise to R32.6 billion by 2029-30. This substantial contribution comes from the airline’s revenue forecasts, flight and passenger projections, thus providing a new boost to the economy.
SAA’s interim CEO, John Lamola, highlights the airline’s restructuring that will allow it to grow autonomously without depending on public funds. He highlights a solid and strategic management model, geared towards sustainability and organic growth. This prudent and thoughtful approach has enabled SAA to emerge from the financial impasse and pay all its debts, thus displaying a healthy and debt-free financial position.
The Oxford Economics Africa study also projects the creation of thousands of additional jobs through SAA’s growth, from 25,200 positions in 2023-24 to 86,700 jobs by 2029-30. This expansion of the company will also have a positive impact on government revenues, helping to strengthen public finances.
Looking ahead to controlled development, John Lamola stresses the importance of measured and thoughtful expansion. With a plan to increase the fleet to more than 40 aircraft over the next five to ten years, SAA aims to explore new international routes while improving its presence on current routes. This strategy of reasoned growth aims to consolidate SAA’s position in the global market while preserving its profitability and sustainability.
In conclusion, the renewal of South African Airways represents a real economic and strategic success, paving the way for a new era of growth and prosperity for the national airline and the South African economy as a whole.