SOUTH AFRICAN Airways has blamed escalating fuel and energy prices, a labour strike, and loss of market share to low cost carriers for its poor 2005/6 annual results. Weaned this year from its parent company Transnet, the airline says it will borrow R4bn this year to recapitalise its business. The airline’s net profit fell by 90% to R65m from R648m in 2004/5 despite revenue rising by 13% to R19.4bn. Chief executive Khaya Ngqula said SAA’s poor showing was in most part due to a “very tough financial year” resulting from factors beyond its control. Despite SAA losing market share to low cost carriers, its passenger numbers grew by 4.5% to R7.2m. Passenger revenue edged up only 0.8% to R13bn, the airline told FTW. Its best performance was with regional flights to other African countries Freight and mail revenue increased 7.9% to R1.6bn thanks to strong increases in cargo revenue on international and regional routes. SAA wants to increase revenue from cargo from its present 9% to 20% by 2010. Difficult conditions this year included rocketing fuel prices that forced up operating costs by 17.7%, mainly due to a 51% rise in energy costs from R3.3m to R4.9m. SAA reported that its 5-year fleet renewal programme was completed in the year. The airline currently owns 14 aircraft and leases 58.
