Johannesburg - The South African Airways (SAA) group has recorded an increase in profits of 45 percent in the past financial year.
CEO Siza Mzimela announced on Monday that the group, which includes Mango, Airchefs, SAA Technical and SA Travel Centre, had made a net profit of R581 million for the 2009/2010 financial year.
The results were released amid an exceptionally tough year for the aviation industry worldwide due to the recession, airlines having to ground aircraft due to volcanic ash, a reduction in travel and increased competition.
Locally, SAA had various corporate governance and Competition Commission challenges.
A forensic report by audit company KPMG fingered former SAA CEO Khaya Ngqula as being behind a series of irregular procurement practices that had cost the national airline millions of rands over a period of five years. The airline was also alleged to be involved in price collusion ahead of this year's FIFA World Cup. At the time, the airline confirmed it had received an email from a competitor on the alleged scam but informed the Competition Commission and applied for leniency in the event that the commission decided to refer the matter to the tribunal.
In the 2009/10 financial year, SAA experienced a 2.4 percent year-on-year decrease in passengers and a 14 percent year-on-year decrease in cargo flown. However, operating costs declined to R21 billion due to the decline in fuel costs (by R3.4 billion) and aircraft lease costs decreasing by R643 million.
It also reported that its routes in Africa remained the most profitable market segment.
Going forward, the airline has identified generating sustainable income, restoring the balance sheet, providing a consistently high-quality service, becoming performance and enhancing corporate governance as its top objectives.
