South African Airways: In the dog box for financial irregularities

south african airways: in the dog box for financial irregularities

South African Airways: In the dog box for financial irregularities

South African Airways has reportedly lost in excess of R207m over the last five years.

This can be put down to wasteful expenditure as well as poor record-keeping practices.

FINANCIAL LOSSES AT SAA

South Africa’s national carrier is said to have incurred more financial losses over the previous five years. This is allegedly due to fruitless and wasteful spending.

The restructured airline resumed scheduled flying in September 2021, yet it still appears to be doing some things the same old way.

AUDITED REPORT

In a report presented to Parliament’s Portfolio Committee on Public Enterprises, the Auditor-General revealed that South African Airways had lost more than R 207m over a five-year period.

The Auditor-General told the committee that it had completed audits for the four financial years until the 2022/2023 financial year.

It cited poor record-keeping and inadequate governance as reasons for the material misstatements.

IRREGULAR EXPENDITURE

Daily Investor states that irregular expenditure over the four audited years grew from R22 billion to R44.5 billion.

Financial record-keeping at the airline is said to be a concern. This prevented the Auditor-General from finding appropriate evidence to confirm irregular expenditure.

Furthermore, the Auditor-General said South African Airways is failing to comply with procurement and contract laws.

“In addition, we could not obtain sufficient appropriate audit evidence to confirm irregular expenditure incurred. Failure to implement consequence management encourages a culture where the disregard for legislation, policies, and procedures thrives,” the report said, per Daily Investor.

SOUTH AFRICAN AIRWAYS

The national carrier is trying to rebuild its flight schedule and reestablish loyalty from South Africans, many of whom have lost faith in the state-owned airline over the last few years.

The restructured airline exited a prolonged business rescue process in April 2021, committing to doing things differently in order to turn its fortunes around.

CHALLENGES IN REBUILDING

The state owned airline is currently rebuilding its fleet, route network and flight schedule.

However, SAA is experiencing challenges as it tries to reestablish itself as one of the major airlines on the African continent.

A transformed aviation landscape with many carriers already having established their operations on key routes makes it hard for SAA to make inroads.

A global shortage of aircraft has also impacted SAA’s ability to scale up its operations.

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