There goes more of my tax money. SAA loose money again

[Ibhayi]

SAA have lost another R1.2 billion during the last financial year.

That is R 3 million per day.

Johannesburg - - State-owned airline South African Airways (SAA) on Wednesday said it had turned around its business, posting a R123m net profit for the year to end March 2008. But this figure excludes restructuring costs of R1.3bn, which, once taken into account, means that the airline posted a loss of R1.1bn.
Total revenue was up 9% from R20.7bn in FY07 to R22.5bn in FY08.


Better?

[SoWhereToNow]

Khaya has failed again! 7.5% profit yeah right, he was clearly smoking his golf socks again...

[divinehover]

If the goverment wants to appoint an idiot to run the airline they must be prepared to pay when he can't deliver. Easy.

[aintboeingaintgoing]

I know that this is slightly off the topic of the losses made by SAA, but I would love to know what the actual load figures are on the London to Johannesburg route, I have been in the UK for quite a while now and come back to SA as much as I can, however when I try to book on SAA they are always at least £100 more than everyone else?? It is July now PEAK UK –SA time and a mate of mine flew in on the 340-600 the other morning and said that there were no more than 150 passengers on board the aeroplane!!

Perhaps this route and their silly pricing structure for the tickets goes a long way towards the R3 million a day loss…..
:confused::confused:

[Avi8tor]

To put it in context:-

SAA flies 7 mil odd pax. They lost R1100 MILLION. So give each passenger, international, regional and domestic, R157.14 each and tell them to go fly elsewhere. This is on the top of the BILLIONS they have lost in the last 10 yrs.

Said it once, will say it again. SELL IT!! Let SAA sink or swim.

[Solid Rust Twotter]

If the goverment wants to appoint an idiot to run the airline they must be prepared to pay when he can't deliver. Easy.

Define they. Govt doesn't generate wealth, they merely spend it.

[Gyro Nut]

FROM AN AVCOM POST (A FORUM WHERE FAR LESS WHINGEING OCCURS):


This report - esp the title - is Mischievous. http://www.avcom.co.za/phpBB3/images/smilies/icon_evil.gif

I was there.
SAA wants to convert its borrowings to equity. ie instead of owing the banks R5 Bn it wants its shareholder to convert the debt to equity. This means that it will be paying the state a dividend rather than interest to the banks.
The airline says it made IINM a R230m profit despite the oil price increase from a budgeted $85 / barrel to $140..
This fuel increase added R900 mn to the costs.
A picture is worth a thousand words, but it uses up three thousand times the memory.

[The Actuator]

I hold no brief for SAA management but when the guy posting the thread title does not know the difference between "loose" and lose...you have to wonder.
(and don't tell me it was a typo).

Back to the topic....

The fact is there is about as much airline management capacity & capability in SAA as there is in Britney Spear's PR department. I would take whatever is presented with a rather large pinch of salt. R1.3bn restructuring costs - rip off of the Coleman order.

Surely if one was a manager at SAA and you did not see that coming your employees and shareholder would be entitled to ask just exactly what it is that you have been managing for the past year or so and then presumably they would be entitled to receive your resignation post haste with a pay back of all monies received for a job not done.

Don't hold your breath more pain to come....

[Ibhayi]

My apologies for the horrendous spending.

I heard a rumour once that the CEO of Qantas, Geoff Dixon, once got the pilots to crank up the speed, the airline board on discovering this invoiced him for the extra fuel

Australia is the answer.

[Ibhayi]

I was there.
SAA wants to convert its borrowings to equity. ie instead of owing the banks R5 Bn it wants its shareholder to convert the debt to equity. This means that it will be paying the state a dividend rather than interest to the banks.
The airline says it made IINM a R230m profit despite the oil price increase from a budgeted $85 / barrel to $140..
This fuel increase added R900 mn to the costs.
A picture is worth a thousand words, but it uses up three thousand times the memory.

Dude take your head out of the sand, SAA will never then issue that dividend. Restructuring, albeit being a once off transaction it did cost money.

Their costs outweighed their income and hence they lost money. I nor any person in their right mind would buy shares in SAA if their was such an option.

Wasn't Khaya on record at some point saying they budgeted for oil at about $70?

[Solid Rust Twotter]

Gyro Nut

Hiding it behind artfully constructed financial shenanigans doesn't make it any less of a burden on the taxpayer. The dividend you speak of is a voluntary contribution when and if the company in question feels like it. Somehow I can't see anywhere near the original "equity" amount ever getting back to the original "lenders", if anything is paid back at all apart from a token contribution whenever awkward questions are asked.

The nice thing about being a cynic is we're right so much of the time....:}

[Avi8tor]

SAA wants to convert its borrowings to equity. ie instead of owing the banks R5 Bn it wants its shareholder to convert the debt to equity. This means that it will be paying the state a dividend rather than interest to the banks.
No, no dividend involved. All that would do is dilute existing shareholder value, if there is any.

....SAA had apparently asked for R3bn from the National Treasury this financial year to offset losses sustained in the last financial year.
Source:- SAPA

I seem to remember SAA getting a similar number last yr?

[Salaamahdontlikem]

Flight to PE very recently, Spoories A319 lines up 03L, then taxis back to bay. Reason? "We forgot some passengers". Waits in the bay for 45 min for a small group of pax (4) to board, has to take on more fuel, finally takes off over an hour later. Real slick operation.

What happened to headcount / pax manifest / customer service? Eish.

[flyknight]

If the goverment wants to appoint an idiot to run the airline they must be prepared to pay when he can't deliver. Easy.


I fully agree.....and that goes for all the "other" state departments :D

[Toppled AH]

SAA's web address should be......DON'TFLYSAA.COM..........it's as simple as that......the funny thing is about them....they always request shorter routes, they always moan when they get put into a hold, they always quarey the ATC when they been told to standby push and start and the best is with all there training they have, they always seem to request 03L when its states clearly on the approach plate about requesting the parrallel runway....and then they run at a loss.....O I don't know.....the ONLY good thing about SAA is the ratings are free.....

[VortexGen300]

Sorry friends to spoil your fun and games - but the content of the original posts are somewhat misleading - this is according to someone that attended the original press conference that was mis quoted in the media.

Facts:
1. SAA was loosing money due to the conditions of the previous bail-out as it was structured as a loan and they have to repay it as well as interest. Nothing wrong in the principle but the main shareholder (the government) is in effect getting preferential treatment in repayment of a loan as well as profit on the loan in the form of interest before the rest of the shareholders get there dues.
2. The circus is also that in effect they are calling for the previous loan to be changed to an investment by shareholders whereby they will not be required to repay interest but only dividends as in any other shareholder.

The idea is for the government to become a shareholde like any other instead of being a preferential shareholder?

So yes they indeed had a loss but not on the operating side - it was on the nett due to the previous loan. In other words the money is already paid but the accounting of the said money is what is at stake.

I guess if you have guys/girls who can't even listen at a press conference (or won't listen or even decide beforehand what they want to write) you can't expect accurate reporting in the media - especially if they want to sell with shocking head-lines. And with the average knowledge of accounting that a lot of people exhibit it is really to be expected that they would be driven by sensationalism rather that accuracy.

VG300

[Avi8tor]

So yes they indeed had a loss but not on the operating side - it was on the nett due to the previous loan."Not on the operating side" ......So you are telling me as long as they get all capital costs for FREE from the tax payer, they can make a profit? Sorry kids, but why should I have to fill SAA's begging bowl every year.

Here's an idea. Let the taxpayer sell its shares to private investors and then it has to run like every other BUSINESS in the world.

[Plore]

And how do you think they should do that Avi8tor?? IMPOSSIBLE

All I can say is thank heavens I got off that sinking (flag)ship

[Ibhayi]

This is absolute bull, every single year the tax pay inevitably feels the pinch. You guys at SAA can cite poor media coverage, the media in SA runs at a profit thou, lack of accounting knowledge on the part of Joe Public, but inevitably you run a poor operation plagued by inefficiency and stupidity. The tax payer loans SAA the money, they can't repay it yadda yadda so can't it to be written off or converted to equity etc. same crap different year.

Surely with the amount of money the tax payer has wasted in SAA it would have been cheaper a few years ago for the government to wipe their debt out and sell it, instead of us every 12 months pumping in a few more billion?

You guys get your head out of the sand, Khaya has a history of ruining every business he has touched. Prior to SAA there was the IDC, then AME and now SAA.

[Solid Rust Twotter]

I guess if you have guys/girls who can't even listen at a press conference (or won't listen or even decide beforehand what they want to write) you can't expect accurate reporting in the media - especially if they want to sell with shocking head-lines. And with the average knowledge of accounting that a lot of people exhibit it is really to be expected that they would be driven by sensationalism rather that accuracy.

I guess if you have folks who won't/can't read the rest of the thread and work out for themselves what a crock it is, they'll continue to spout drivel trying to sound clever without actually being aware of being shafted every time SAA requires another handout.

[VortexGen300]

If

1. SAA is so bad and
2. South Africa is so bad

WHY ON EARTH ARE YOU STILL HERE AND BOTHERING?

1. If Australia is so good - WHY IS THEY IN SO MUCH OF A BOTHER LOOKING FOR PILOTS FROM SA?

MAYBE ALL SHOULD TAKE THEIR PRECIOUS BELONGINGS (TAX MONEY) AND ATTITUDES AND GO FLY FOR QUANTAS? I BET YOU YOU WILL SOON BE BACK AS THE GRASS IS ALWAYS GREENER ON THE OTHER SIDE AS THERE IS USUALLY MORE SH!T!

I'm off to the local PUB for a BEER!

VG300

[beechbum]

Flight to PE very recently, Spoories A319 lines up 03L, then taxis back to bay. Reason? "We forgot some passengers". Waits in the bay for 45 min for a small group of pax (4) to board, has to take on more fuel, finally takes off over an hour later. Real slick operation.

What happened to headcount / pax manifest / customer service? Eish
Can't see what this has to do with the thread but anyway.......SAA has not been the only airline to do this, with BA/Comair suffering the same fate some time ago!
Maybe SAA should stop paying their senior management retention bonuses and we might see a little cash left in the coffers! Just a thought Khaya!
And by the way VG300...Qantas spelt without a 'U'.........!

[Solid Rust Twotter]

Who said anything about Australia? We're talking about SAA's habitual bail out policy and their attempts to hide the fact that sponging off the tax payer is the only way they can stay afloat while squandering billions. Don't let the voices in your head confuse you.

As Beechbum says, it's QANTAS - Queensland And Northern Territory Air Service.

[Avi8tor]

Nobody is saying SAA or South Africa is 'so bad'. What we are saying is that both have problems. Wasting resources on badly run state airlines is NOT a winning solution.

Frankly, where I live or work won't affect the problem either.

[james ozzie]

"As Beechbum says, it's QANTAS - Queensland And Northern Territory Air Service."


ahem..."Aerial Services"

(ref Wiki, sorry couldn't resist; pedant..)

[Solid Rust Twotter]

Bugger!:O:}

[Flyer14]

My view is that it is an unfair playing field. SAA has the most efficient fleet in the country and yet they still can't turn a profit? No-one gave Nationwide, Flitestar or Sunair money when they needed the injection (a tiny fraction of what SAA wants) so why should SAA get it? Such practises call only result in a monoply of the industry and the stifling of private enterprise.

[beechbum]

SAA has the most efficient fleet in the country and yet they still can't turn a profit
This unfortunately only forms part of the equation. Things go deeper than just a fuel efficient modern fleet. It's the 9000 or so employees that bleed the cow dry. It's the hundred or so managers sitting in little offices commanding huge salaries and being paid bonuses etc for hanging around. It's money that is being channeled in the wrong direction that form part of a business' loss whether it be SAA or any other huge conglomerate. Part of the restructuring effort was to trim the excess fat...somehow I think the top echelons of the company are still too fatty..!!!!

[Ibhayi]

MAYBE ALL SHOULD TAKE THEIR PRECIOUS BELONGINGS (TAX MONEY) AND ATTITUDES AND GO FLY FOR QUANTAS? I BET YOU YOU WILL SOON BE BACK AS THE GRASS IS ALWAYS GREENER ON THE OTHER SIDE AS THERE IS USUALLY MORE SH!T!

If the South African government would let people take their money, as I am sure you are aware there is a R2 million investment limit, a R5 million immigration limit, yet once you have declared your self immigrated you can take a certain amount, depending if the reserve bank don't keep loosing your tax clearance certificate to hinder the flow of money out of SA, you can pay 10% of what u are taking in tax and take the rest. In theory but the reality is the keep blocking it, loosing the paper work etc. Now I don't have that much, just finished university. :)

So let me take my small amount, to a country where I will have to pay more tax, but I don't object, the services are functional.

Yes I have an Australian permanent residents visa, leaving after xmas.

[very old flyer]

The dilemma is that the SA government is in about twenty minds as to what should be done. The realists want SAA sold, but are held back by some of their own ANC members, and most certainly by COSATU and the SACP. The latter actually want to get SASOL back as a state run entity, and are still chipped off about the former ISCOR.

SAA needs to be sold off, with a public share offering, for listing on the JSE. Only then will it be run as a proper, competitive business which will sink or swim on its own merits.

The operational staff are professionals who can hold their heads up high, but are let down by a bunch of ANC appointees who are generally incompetent.

The status quo is the most likely option for the immediate future.

[Ibhayi]

What I find so very interesting is there is a US law which states that any person flying on the states tab needs to fly on a US based carrier, irrespective of the cost.

Delta Airlines got about $60 million last year from US government business. Now the merits of this system is debatable.

Recently somebody I know was flying BA First Class and a government minister was in the cabin as well. Why are they not on SAA which won't actually cost us anything unless of course they bump a paying pax.

[Jamex]

Well said Beechbum. Things do go further than just fuel efficient aircraft. But before we try to withhold those "deserving managers" performance bonuses we may just first want to see their job descriptions. Kind of like ESCOM where the CEO was entitled to his performance bonus even though the country was plunged into darkness with the resultant damage to the economy, he had actually performed in terms of his job description because the bonus had nothing to do with him ensuring ESCOM generates electricity efficiently (as stupid old me thought!) but rather, he had "transformation" targets to achieve and he had, in fact, exceeded his targets!!:ok: Fourteen years into an ANC government and they are still "transforming" the country? Only in Africa:ugh::ugh::ugh:

[Ibhayi]

Just like the problems now facing the department of water.

[Doodlebug2]

Jamex, it takes about 20 years to transform a country - just look slightly north!:E

[Jamex]

Agree, Doodlebug2. Once the inertia has been overcome then the momentum gains are quick and things really run downhill fast!

[Plore]

Just by the way, Kaya is also the guy that sank ISCOR.

Coincidence????
I dont think so

[Juliet Sierra Papa]

Any further views since the Carte Blanche interview this evening? :hmm:

Juliet Sierra Papa

[Tin-Tin]

Stop moaning!! :yuk:

[skyshark]

i dont profess to know whats going on with saa and government handouts and actually dont really care. Just think if saa dont get our money it would just be more for the dodgey corrupt politicians to get hold of, what is worse! As for those whiners at comair etc that go on about saa putting airlines out of business i really think saa are to busy trying to keep their house in order. Maybe those other airlines should look at their maintenance track record and maybe then engines wont fall off

[Ibhayi]

As for those whiners at comair etc that go on about saa putting airlines out of business i really think saa are to busy trying to keep their house in order. Maybe those other airlines should look at their maintenance track record and maybe then engines wont fall off

SAA was paying travel agents to lie to people about bookings and book them on SAA flights. They were using our tax money to bully their rivals, the minister of tourism a few years ago said it is about time we stopped using the state to protect SAA as it will help our tourism industry.

How can you compete against a business than can not fail? That can effectively price themselves cheaper than anybody else and not go out of business?

Comair are perfectly within their rights especially since other government departments are now trying to bully them such as the department of employment or what ever title they go by these days. Trying to demand they pay a fine for people not being black? Well our constitution says NO racial, gender classification there is no criteria for qualification and how to qualify race in south africa. It is funny my family has been in Africa for 300 hundred years so why am I not African?

[Doodlebug2]

Don't worry Ibhayi, by my reckoning you have about 6 years to find the answer to your poser. When the wheels REALLY come off (about the time of Zuma's second re-election)...THEN you will find out if you are an African (or not)!

[TAVLA]

Sorry Ibhayi, but both Comair and Nationwide were paying agents bigger incentives than SAA. Check with your boss. SAA got nailed because under SA competition law, the dominant player (ONLY) may not provide incentives.

That's one of the reasons Nationwide's lawsuit failed.

According to your logic then Comair and Nationwide paid (and as far as Comair goes, still pay) the agents to lie.

Sorry for off topic puff of truth, now back to SAA bashing.

T