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Gigaba: SAA will recover

Sapa

After two consecutive years of of losses, SAA will become profitable again, the public enterprises minister has promised.

SAA will turn its fortunes around, says Public Enterprises Minister Malusi Gigaba. (Roger Sedres)

Loss-making national carrier South African Airways (SAA) will return to profitability, Public Enterprises Minister Malusi Gigaba pledged on Monday.

"Last year, we said we expected that the airline will continue to make losses over the next three to five years," Gigaba said at the New Age business briefing in Johannesburg. "But we will turn the corner as we move to improve and ensure that the turnaround strategy is implemented."

SAA suffered a loss of R900-million in 2012/13, it was announced on Thursday. Government made a guarantee to SAA to enable it to carry on operating. The airline reported a loss of R1.25-billion in 2012.

Total revenue rose to R27.1-billion in the year under review from R23.9-billion in the previous financial year. This was due to increases in airfares, passenger revenue and capacity. Airfares increased by 7%, which was partially driven by the weakening of the rand.

Gigaba said the figures showed an improvement, with over R1-billion in operating costs saved.

The Minister unveiled a 12-year turnaround strategy for SAA in September last year, including consolidating its routes and upgrading its fleet.

New rail network
Meanwhile, Gigaba said, a new 6 500km rail network to be completed in the next five years will bring relief to the country's roads.

"Around 1 317 new locomotives and 25 000 new wagons will have been acquired by Transnet," Gigaba said.

"The shift from road to rail for both passengers and freight is good for the economy and will improve the efficiency, safety, and quality of our roads."

Transnet's handling capacity would increase by 75%, he said.

A multi-billion rand infrastructure roll-out and investment by Transnet and Eskom would be "a game changer", he claimed.

Black mining
Eskom has finalised the design of a fund for developing mines to help emerging black miners.

"By 2015, we will ensure that over 50% of coal to Eskom comes from black miners," said Gigaba.

Gigaba said Eskom and Transnet were becoming leaders in their own fields.

"The two enterprises will be able to implement and leverage projects on a scale and capacity that is beyond any organisation in South Africa," said Gigaba. – Sapa

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