Spiralling fuel costs, a strike and a later-than-planned introduction of new routes saw South African Airways’ (SAA) operating profit for the year ended March dwindle from R1-billion to just R300-million, it was revealed on Tuesday.
This was despite a 12,5% increase in revenue to R19,6-billion for the year, which included an amount of R1-billion (2005: R401-million) relating to the release of prescribed ticket sales to income and fuel levies amounting to 2,2-billion (2005: R1,2-billion).
Fuel costs rocketed by a whopping 51,5% over the 12-month period, resulting in a 17,7% spike in operating expenses, which amounted to R19,3-billion.
SAA said the fuel levies were insufficient to cover the increased energy costs.
In 2004, the national air carrier reported a R3,7-billion operating loss.
SAA is one of the businesses that has been classified as a discontinued operation by transport parastatal Transnet, which has concluded a share-sale agreement worth about R2-billion with the Department of Public Enterprises for the transfer of SAA to the department as a stand-alone stated-owned enterprise with effect from end of March 2006.
Transnet will oversee the transfer of the airline over the next few months until the fulfilment of certain suspensive conditions. — I-Net Bridge