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GOVERNMENT-owned South African Airways (SAA) on Wednesday July 16 said it owed its improved results for the year to end March 2008 to its restructuring programme.

“The first year of restructuring was largely financial in nature, and was completed with three percent above target, which was a significant achievement,” SAA CEO Khaya Ngqula said.

“More than R1-billion in costs have been taken out of the organisation, and there has also been a positive impact on revenue as a result of restructuring.” The airline reported a significant turnaround to post a R123-million net profit (excluding restructuring costs) from ongoing operations, against a loss of R883- million the previous year.

Total revenue rose nine percent to R22.51-billion in 2007/08 from R20.65-billion the previous year. Operating costs increased to R23.62-billion in the year to end March from R21.17- billion the previous year.

The main contributor was the energy bill, which rose R951-million to R6.68-billion and made up almost 30 percent of total operating costs in the review period, the airline said. Excluding energy costs, operating costs increased 9.74 percent, which was still below inflation and “reflected the improvements made as a result of the restructuring”.

The airline’s improved operational performance was reflected in the improvement in cash generated from operations, which jumped to R1.39-billion in the review period from R316-million previously. “This was the result of improved revenue management and the significant reduction in costs which formed part of the restructuring programme,” SAA said.

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