SAA’s Cash Crisis: Profitable on Paper, Broke on Payday?

By Garth Calitz

South Africa’s national airline has managed to turn the business of moving passengers around the world into a rather uncomfortable exercise in explaining where the money went. With salaries being staggered, suppliers reportedly demanding cash upfront and a R1 billion government guarantee in the picture, the obvious question is whether SAA has a cash-flow problem — or a much bigger problem dressed up in accounting terminology.

There is a particular kind of financial magic that deserves its own place in the aviation hall of fame. It is the ability to announce a profit, secure government-backed financial assistance, delay staff salaries and then reassure everyone that the situation is under control. In ordinary business, that combination might prompt a few awkward questions from the bank manager. At South African Airways, it has prompted questions from Parliament, a fresh round of explanations and the distinctly uncomfortable possibility that the national carrier's financial recovery may be looking considerably healthier on paper than it does on payday.

Welcome to SAA, where the aircraft may be scheduled, the passengers may have tickets and the annual reports may contain reassuring numbers, but the most important departure of the month could be the money leaving the bank account. And apparently, that departure requires careful coordination.

The R1 billion question: A guarantee is not a magic money machine

Let us begin with the number that should make every South African taxpayer sit up a little straighter. R1 billion.

That is the value of the government guarantee provided to SAA in August 2026 to help it raise working capital. Treasury was careful to explain that this was a guarantee, not a direct cash allocation. In other words, the government has not simply deposited a billion rand into SAA's account and wished it happy flying. Instead, the guarantee helps the airline obtain financing, with the state potentially carrying the liability if things go wrong. There is a difference, of course. But to the taxpayer, the distinction may eventually become rather academic if the guarantee is called upon, the only difference being the amount of interest charged by the financial institution.

A guarantee is a useful financial instrument. Businesses use them every day. The problem arises when a supposedly recovering national airline needs one to keep its working capital flowing while struggling to pay its own employees on time. It raises an entirely reasonable question: if SAA has recovered sufficiently to operate commercially, why does it need government-backed assistance to manage its day-to-day finances?

The airline attributes its difficulties to a volatile international environment, geopolitical instability and higher aviation fuel costs. Those are legitimate pressures. Airlines worldwide are exposed to fuel-price shocks, currency movements and unpredictable operating costs. But other airlines also face expensive fuel. Their finance departments do not automatically receive a national budget allocation every time the oil market has a bad week.

SAA's circumstances are complicated by its history, its fleet requirements and the challenge of rebuilding its network. That makes financial discipline more important, not less. And a guarantee, however substantial, does not fix a business model that consistently consumes more cash than it generates.

SAA generated approximately R1.1 billion from selling one of its two slots at London's Heathrow Airport. According to reporting by The Sunday Times, sources familiar with the airline's finances alleged that the proceeds were initially intended to support fleet expansion and network growth, but were subsequently diverted towards operating losses. These claims have not been established as findings of wrongdoing. Parliament has asked for a formal explanation of how the proceeds were used.

Selling an asset is not inherently bad financial management. Businesses sell assets to raise capital, restructure operations and fund investments all the time. The question is what happens next?

If the money was used to fund an approved recovery plan, there should be a clear paper trail showing where it went and what it achieved. If it was needed to cover operating shortfalls instead, management needs to explain why the original financial projections proved insufficient and what has changed to prevent a repeat.

Because selling an asset to finance expansion is one thing. Selling an asset to keep the lights on is another. And selling an asset, burning through the proceeds and then needing government-backed financing raises the obvious question of whether the underlying business is generating enough cash to sustain itself.

Heathrow slots are valuable assets. They are also finite. One cannot keep selling the family silver every time the household budget encounters turbulence. At some point, the silverware cupboard is empty.

In February 2026, SAA announced a R155 million profit for the financial year ending March 2025. That sounds encouraging. After years of business rescue, restructuring and billions of rand in public support, a profit should have been a milestone worth celebrating. There is, however, an awkward complication.

Reported operating revenue was R9.26 billion, while operating costs were R9.58 billion. That leaves a gap of approximately R320 million between operating revenue and operating costs, before other income, expenses and accounting adjustments are considered. The Auditor-General also issued a disclaimed audit opinion, raising questions about the reliability of the financial statements.

This does not automatically mean that the R155 million profit was false. An airline's final result can include non-operating income and other accounting items that affect the bottom line. But it does mean that the headline profit cannot be considered in isolation.

A business can report a profit and still run short of cash. It can have valuable assets but insufficient liquidity. It can record income on paper while struggling to collect payments or settle bills.

A proper investigation needs to establish what the profit consisted of, how much cash the airline generated from its actual operations, and whether the reported financial position fairly reflects its underlying performance. The public deserves more than a reassuring headline and a set of figures that require a financial detective to decipher.

According to reports, SAA informed staff that October salary payments would be staggered across several days, following a similar episode in September. The published schedule placed payments between 27 and 31 October, although the airline subsequently said most employees would receive their salaries on the normal payday, with others experiencing delays of a day or two.

SAA says it has engaged employees and organised labour and that the measures are intended to protect the sustainability of the business. Fair enough. But there is a rather large difference between managing payroll efficiently and having to manage it according to the cash available in the bank.

Employees have bond repayments, debit orders, school fees, groceries and transport costs. Their landlords are unlikely to accept a letter explaining that geopolitical instability has affected the liquidity position of their tenant. Nor will a bank necessarily respond to a delayed home-loan instalment by praising management for its commitment to sustainability.

For airline employees, the uncertainty is particularly troubling. They are expected to deliver reliable service, maintain safety standards and represent the national carrier professionally, all while wondering whether their salaries will arrive when expected. Pilots, cabin crew, engineers and ground staff cannot reasonably be expected to treat their own household budgets as flexible working capital for their employer.

The irony is that aviation is an industry in which timing is everything. Aircraft must depart within their slots, crews must comply with duty-time limits, maintenance must be completed on schedule and passengers are expected to arrive at the airport at the appointed hour. Apparently, the calendar becomes a little more negotiable when it comes to payroll.

The airline has been without a permanent CEO for months, with several senior positions occupied in an acting capacity. Matshela Seshibe, who had been appointed acting CEO, was suspended only weeks into the role.

This is a major concern to the taxpayer, as a company facing rising costs and cash shortages needs management capable of making difficult decisions, explaining those decisions and demonstrating that the business is moving towards sustainability. It also needs continuity. A revolving door of acting appointments is hardly an ideal environment in which to execute a complex fleet strategy, rebuild international routes, negotiate with suppliers and convince potential investors that the business is a sound proposition.

Investors tend to appreciate certainty. They generally prefer knowing who is in charge, what the strategy is and whether the numbers add up. The national carrier's challenge is not simply to find more money. It must also demonstrate that the money it already receives is being managed effectively.

On 26 October, The Citizen reported that a source claimed a second business rescue had been discussed at board level. SAA spokesperson Mphilo Dlamini denied that any board meeting had considered a return to business rescue. No confirmed decision to re-enter business rescue has been announced. Nevertheless, the fact that the possibility is being discussed publicly illustrates the seriousness of the questions surrounding SAA's financial position.

The airline emerged from its previous business rescue in 2021 after the state spent approximately R38 billion settling legacy debt. It reportedly began its post-rescue operations with R2.5 billion in working capital and no debt. Five years later, it is again facing cash-flow pressure, delayed salaries and reliance on a government guarantee.

This may not be definitive proof that the recovery has failed, but it is certainly reason to ask what the recovery has achieved, how sustainable it is and whether the underlying problems have been resolved. Business rescue is not supposed to be a revolving door through which a company periodically exits, collects its certificates and returns when the money runs out.

Parliament wants answers. Taxpayers should too.

Parliament's Standing Committee on Appropriations has requested an urgent report from Transport Minister Barbara Creecy covering SAA's financial and cash position, its 2025/26 audit, the use of the Heathrow slot proceeds, the possibility of further state support and the status of investigations into concerns raised about its financial reporting.

The requested deadline is 30 October 2026. The committee has explicitly said that the allegations raised are untested and that it is not drawing conclusions at this stage. That is the right approach. Allegations must be investigated, financial statements must be scrutinised, and conclusions must be based on evidence.

That does not mean SAA should automatically be closed or sold, though many senior members of the industry advocate for this. It means the case for continued support must be supported by credible financial information and a convincing plan for sustainability. If the airline requires temporary assistance because of an exceptional fuel-price shock, management should be able to quantify the impact and demonstrate how it will recover. If the problem is a structural mismatch between revenue, costs, fleet capacity and route profitability, another guarantee merely buys time. If financial reporting cannot reliably explain the airline's performance, the priority must be to establish a trustworthy picture of the business before anyone considers writing another cheque.

South African taxpayers have already contributed substantially to SAA's recovery. They are entitled to know whether that investment is producing a viable airline or simply financing the next chapter of an expensive toilet dump.

SAA is not necessarily insolvent simply because it has delayed salaries. Nor does a government guarantee automatically constitute another bailout in the conventional sense. Higher fuel costs and geopolitical disruption are real challenges, and the airline deserves to have those pressures assessed fairly. But two consecutive months of staggered salary payments, a R1 billion government guarantee, questions about the use of a R1.1 billion asset-sale windfall, leadership instability and an unresolved debate over the quality of the financial reporting amount to a serious set of warning signs.

The answer is not another glossy recovery presentation. It is transparent accounts, a credible cash-flow forecast, clear executive accountability and measurable milestones that demonstrate whether SAA can stand on its own financial feet.

The airline's management needs to show that it can pay its staff, settle its suppliers, fund its operations and invest in its future without relying on the taxpayer as a permanent financial backstop. Because there is a fundamental difference between an airline experiencing turbulence and an airline that has developed a recurring dependence on emergency assistance. One needs to ride out the storm. The other needs to explain why the same storm keeps appearing in the financial forecast.

And while SAA works on its next recovery strategy, perhaps someone should check whether the national carrier's financial flight plan includes a destination called Sustainable Operations. It would be reassuring to know that it exists — and that this time, the airline has enough fuel to get there.