Lamola's exit exposes SAA's shaky foundations and questionable profits

South African Airways (SAA) group chief Professor John Lamola resigned on Friday amid a slew of problems at the national carrier.

While SAA said that it had achieved an operating profit of R336-million and a group net profit of R155-million for the financial year ending 31 March 2025 — results of which were published in February 2026 (no, that’s not a typo) — the Auditor-General of South Africa, Tsakani Maluleke’s report for the same period cannot find evidence of this claimed financial health.

Even in its own press release for the 2024/2025 annual financial results, the organisation claimed revenue of R8.838-billion, while the integrated annual report shows a revenue of R9.266-billion.

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The Auditor-General also highlighted that while the national carrier is crowing about profits, it actually missed its target financial sustainability Ebitda of R241-million by quite a wide margin, achieving a loss of R433-million instead.

A stall manoeuvre

Since President Cyril Ramaphosa’s sunsetting of the Department of Public Enterprises, administration and oversight of SAA has fallen under the gaze of the Department of Transport and the watchful eye of Minister Barbara Creecy.

Creecy has not made an official statement about Lamola’s resignation, but the SAA statement did contain an endorsement for the remaining board members that was co-signed by the minister.

“The Board has also noted the recent resignation of three Board members for varying reasons. The Minister of Transport, as shareholder representative, has expressed confidence that the remaining 10 Board members possess the requisite expertise and experience to continue discharging their fiduciary duties effectively.”

This all transpired after the acting chief financial officer, Lindsay Olitzki, took early retirement one day before the close of the last financial year (ending 31 March 2026) after more than 14 years with the airline.

Lamola’s exit, synchronised with the unexplained departure (Daily Maverick has asked for a reason) of three critical non-executive directors, leaves the national carrier structurally rudderless at the exact moment it requires skilled fiscal navigation.

Adding fuel to the governance fire, the board swiftly appointed Matshela Seshibe — CEO of SAA’s catering subsidiary, Air Chefs — as acting group CEO, bypassing internal executives with decades of aviation experience for a food logistics manager whose previous tenure at Daybreak Farms ended in a suspension over alleged governance failures.

The bigger question

The bigger question is: how exactly did SAA manufacture its R155-million profit? The answer is: it sold the family silver.

First, there’s a R317-million baseline operational loss, which shows that the core business model fails to generate enough cash to cover basic day-to-day expenses.

To paper over this bleeding wound, SAA liquidated one of its two highly coveted, irreplaceable take-off and landing slot pairs at London’s Heathrow Airport. This single disposal generated a massive one-off net gain of R1.169-billion, mathematically overwhelming the carrier’s operating losses on the balance sheet.

The secret is taxpayer funding

There was also a silent R1-billion capital injection by the government during the 2024/2025 financial year. Despite repeated political declarations that SAA no longer relies on the sovereign fiscus and operates independently of the public purse, this cash injection was structurally disguised as the issuance of new shares to the state.

An insolvent, wholly state-owned entity issuing unmarketable shares to its sole shareholder in exchange for taxpayer cash is functionally indistinguishable from a direct bailout. The Auditor-General saw right through the accounting gymnastics, issuing a disclaimed audit opinion, the most severe and detrimental auditing classification possible.

Add to that a R505-million tally in irregular expenditure, and a situation where SAA Technical failed to correctly apply IFRS 15 revenue recognition standards, leading to an understatement of revenue by R97.8-million.

Structural terminal velocity

That direct sale of the Heathrow spots is a consequence of the failure of the Takatso Consortium privatisation transaction in March 2024. Without Takatso’s promised R3-billion operational capital injection, SAA has been forced to fund capital-intensive route expansion out of a negative operational cash flow.

Compounding this existential crisis is a global supply chain bottleneck. SAA is trapped in an overheated, seller-dominated leasing market for its aircraft fleet. It has been forced into expensive short-term wet leases (ACMI contracts) and is reliant on ageing, fuel-inefficient A340-300s to maintain its schedule.

Operating these legacy four-engine airframes in a high-fuel-cost environment erodes any yield gained from increased passenger volumes.

The return to health of a cornerstone in the Department of Transport’s 2030 targets to handle 1.5 million tonnes of air freight and more than 42 million passengers through South African airports has been greatly overstated. The wounds are starting to bleed through the dressing. DM