SAA confirms staggered salary payments for second month amid cash flow pressures despite R1 billion government guarantee
A South African Airways (SAA) plane arrives at Perth International Airport on 7 April 2006. Picture: Paul Kane/Getty Images
South African Airways (SAA) has admitted to staggering employee salary payments for a second consecutive month amid mounting liquidity pressures.
The admission follows media reports that staff will receive their October salaries on different dates.
It raises further questions about the national carrier’s ability to meet its financial obligations.
Sources indicated that an internal memorandum informed employees that October salaries would be paid between 27 and 31 October. Ground staff and cabin crew were scheduled to receive payment first, followed by pilots, management and executives.
September salaries were also purpotedly delayed, with some employees receiving their money only in early October. A source inside the carrier confirmed that their and other salaries may be paid as much as five days late this month.
The latest difficulties follow a R1 billion government guarantee issued in August to support SAA’s working capital requirements. This comes despite previous assurances that the airline had become financially independent.
Paycheques at least 5 days late
SAA spokesperson Mphilo Dlamini confirmed on Friday that financial pressures had necessitated the staggered salary payments in September and October. He attributed the difficulties to geopolitical disruptions, rising aviation fuel costs and challenging international operating conditions.
“Despite the significant liquidity pressures arising from geopolitical disruptions and increased fuel costs, the airline has continued to honour its obligations to staff,” Dlamini said.
He said employees and organised labour had been consulted about the arrangements, adding that the measures were necessary to preserve business sustainability while continuing operations.
Dlamini said SAA’s board and management had intensified cost controls, reviewed expenditure and introduced closer monitoring of cash flow. Additional revenue-generating initiatives were also being pursued to improve financial stability.
SAA defends R1bn guarantee
The airline defended the R1 billion government guarantee, saying it provided a mechanism to raise capital under current economic conditions.
Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage blamed the airline’s financial difficulties on leadership instability and political interference. He questioned government’s commitment to appointing suitably qualified executives and ensuring professional management.
“It’s leaderless now. It’s rudderless,” Duvenage told The Citizen, criticising the continued reliance on acting executives.
He said the latest financial backing contradicted repeated assurances that SAA would no longer burden taxpayers. “It is a bailout, whether it’s a backing,” he said.
Government guarantees, he added, represented financial commitments ultimately carried by the public.
Duvenage also questioned whether government was taking the airline’s long-term financial sustainability seriously. He said political considerations continued to undermine professional management and accountability at state-owned enterprises.
SAA’s financial difficulties have also attracted parliamentary attention. Dlamini confirmed receiving correspondence from Parliament’s Standing Committee on Appropriations and promised a comprehensive response.
He said SAA welcomed parliamentary oversight and would explain its financial position and rising operating costs. The airline would also outline measures being implemented to improve financial sustainability.
However, SAA did not disclose the extent of its current cash shortfall. It also did not indicate whether the latest government guarantee had already been used to secure additional borrowing.
