South African Airways reported a R966-million net profit for the year ending on June 30 on Wednesday, up from an R8,6-billion loss in 2004. The company’s chief executive officer Khaya Ngqula told a media conference the company made the profits after cutting costs and growing revenues.
”In the year under review our operation costs have increased much slower than our revenue — a simple formula we intend to pursue going into the future.”
Ngqula said the company will focus on capturing markets in China, Nigeria and India.
”In this industry if you can’t play in these countries you are not going to last very long.”
A year ago SAA was on the brink of technical insolvency, with a multibillion-rand loss on its hedge book. The company was bailed out by the government.
Chief financial officer Tryphosa Ramano said SAA cleaned up its R6-billion hedge on June 30 last year.
”Last year we were technically insolvent. We are rebuilding the company, this is a very difficult challenge.”
Ramano said passenger numbers had grown by five percent in the past year, and the airline was now carrying 6,8-million travellers annually.
She said 59% of revenue came from international visitors and 25% came from domestic travellers.
The company was hit by high energy costs in the past year mainly due to a rise in the oil price. – Sapa