SAA under scrutiny after CEO John Lamola’s exit as AG flags weak controls, revenue leaks

Barely two weeks after the resignation of Chief Executive Officer John Lamola, South African Airways (SAA) is facing renewed scrutiny after South Africa’s Auditor-General flagged weak financial controls, revenue leakages and poor reporting standards at the state-owned airline.

A team from the Auditor-General’s office briefed Parliament’s Portfolio Committee on Transport on the airline’s audit outcomes for the 2024/25 financial year, pointing to what officials described as “inferior” financial statements, billing inefficiencies, and significant internal control failures across the group.

The findings come at a sensitive time for the national carrier. Lamola is set to step down at the end of April 2026, as SAA navigates leadership changes and questions about its long-term recovery. Reports also showed that the airline received more than R1 billion ($58 million) in fresh equity support from the South African government during the 2024–25 financial year, underscoring continued reliance on public funds.

Audit issues cloud SAA results

SAA and its subsidiary SAA Technical (SAAT) both received disclaimer audit opinions, meaning auditors could not obtain sufficient evidence to form an opinion on their financial statements. Air Chefs, another subsidiary, improved from a disclaimer to a qualified opinion, while Mango, which remains under business rescue, and Share Trust had outstanding audits.

Despite those concerns, SAA reported a net profit of R155 million ($9.03 million) and operating profit of R336 million ($19.6 million) on revenue of R9.27 billion ($540.3 million) for the financial year. However, much of that improvement was driven by a R1.17 billion ($68.2 million) gain from asset disposals, including aircraft, property and Heathrow landing slots.

Without those once-off transactions, the airline’s profit before tax of R173 million ($10 million) would have become a loss of nearly R996 million ($56.3 million), underscoring pressure on core operations. The airline reported a 65 percent load factor and negative EBITDA of R443 million ($25.82 million), missing its target of positive R241 million ($14 million). The report also drew attention to executive pay. Lamola’s compensation rose 23 percent to R4.7 million ($0.27 million), while other executives recorded increases of between 23 percent and 36 percent.

Leadership exits deepen SAA uncertainty

Senior audit manager Thato Kunene told lawmakers that outcomes at SAA and SAA Technical had remained largely unchanged for seven years, reflecting a weakened control environment. He noted that payments were sometimes processed without adequate proof of delivery and that errors in performance reports could affect decision-making and public confidence.

Seshibe acknowledged the audit findings, saying the airline accepts the results and is focused on corrective steps. “We are not disputing the figures,” he said, adding that management is working on action plans to address control gaps and improve alignment between operational and financial reporting.

Leadership changes have added to uncertainty. In addition to Lamola’s resignation, three board members recently stepped down, while the chief financial officer retired. The airline appointed Air Chefs CEO Matshela Seshibe as acting group chief executive while it begins a search for a permanent leader.