The factors affecting the performance of South African Airways and its impact on economic growth

Abstract

The study sought to understand the factors that affect the performance of SAA and the impact it has on the economic growth of South Africa. This enterprise services thousands of South Africans every year; importantly, it also supports the national development agenda set out by government. However, SAA is a company in financial distress and has been kept afloat by continuous financial bailout from government. For instance, SAA last recorded a profit in 2011 and has been in continuous decline over the years due to factors like corruption and poor management. The South African government have been providing the much needed financial assistance with the intention to rescue SAA. In 2020, government committed a R10.5 Billion business rescue fund to help the entity in its operational management. This study employed a quantitative methodology where a correlational design was used to describe the linear relationship between the variables of this study. Data was collected from various archives documents, dating from 2001 to 2019. This included annual reports on finances, government reports, publications and budgets on SAA. Content analysis and time series analysis were used to measure and analyse publicly available archives on SAA.

The results indicated that almost all the variables are normally distributed. This was further confirmed by the skewedness and kurtosis test for normality, showing consistency in the results. The results for return on equity and taxation showed non-normality based on their significant value, and this was corrected by taking their log transformation. Equity and employee benefits also disclosed a significant positive relationship with the two performance indicators. The findings suggest that the issue of shares to the general public attracts more financial resources to SAA, which ensures stability and higher performance.