South African Airways (SAA) is en route to become one of the biggest contributors to the nation’s fiscus if it keeps up the good work it has done over the past few years, determined a study by Oxford Economics Africa.
The study examined the SAA Group’s core economic contribution by analysing the impact of direct activity generated by the entity on tourism and international trade, as well as the indirect activity stimulated by its procurement spending and the induced impact that the wages of its workers and those in its supply chain support in the consumer economy.
The SAA Group comprises subsidiary companies SAA Technical and Air Chefs, and includes divisions SAA Cargo and SAA Voyager.
SAA’s bright future
The Oxford study found that SAA’s Gross Value Add (GVA) to South Africa’s GDP in the 2023/24 financial year amounted to R9.1 billion.
Utilising a methodology that distills downstream and related economic benefits from SAA’s practice, analysts project that the airline’s GVA will more than triple by 2029/30 to R32.6 billion.
The study also shows that the SAA Group’s operations will support 86,700 jobs by 2029/30, up from 25,000 jobs in 2023/24.
In addition, the SAA Group’s operations stimulated tax revenues of R1.1 billion in 2023/24, a figure that is projected to rise to R4.4 billion in 2029/30.
In terms of its impact on tourism, the report estimates that the national flag carrier’s contribution to the sector amounted to R1.7 billion in 2023/24 and is likely to rise to R8.9 billion over the next six years.
The SAA Group’s trade impact in 2023/2024 amounted to R300 million, which is forecast to quadruple to R1.2 billion over the same period.
“The Oxford Economics Report affirms that the State’s contribution as the sole shareholder in SAA has not been without a tangible return on investment,” said SAA Interim CEO, Professor John Lamola.
“In turn, as the study ventures into a forecast of future impacts as derived from SAA’s growth and expansion plans, it serves as an independent validation of SAA’s current five-year corporate plan.”
SAA emerged from business rescue in 2021 with just six aircraft and five routes.
Fast forward to today, and it boasts a fleet of 16 aircraft and will take delivery of an additional seven during calendar year 2025.
The current footprint of 16 destinations is also modelled to support the extension of the route network into Europe, North America, and East Asia as SAA maintains its strategic brand as a premium international network carrier.
“It is heartening to know that the impact of SAA dedicated staff goes beyond this organisation,” said Lamola.
“It is helping build the South African economy, which ultimately impacts the upliftment of the African continent.”
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