SOUTH AFRICAN AIRWAYS

SOUTH AFRICAN AIRWAYS

INTEGRATED REPORT 2013

South Africa¡¯s National Airline

mission

To deliver sustainable profits and grow market

share through world-class service to customers

internally and externally.

Vision

An African airline with a global reach.

CORE BUSINESS

The movement of people and goods by air.

CORE VALUES

Safety

Adopting a zero-defect philosophy

and striving for zero safety incidents

through proper training, work practices,

risk management and adherence to safety

regulations at all times.

CUSTOMER-FOCUSED

Striving to meet the unique needs of

customers (internally and externally) by

tailoring each interaction to suit their

specific needs.

INTEGRITY

Practising the highest standards of

ethical behaviour in all lines of work

and maintaining credibility by ensuring

that SAA¡¯s actions consistently match

its words.

VALUING ITS PEOPLE

SAA IS COMMITTED to their satisfaction,

development and well-being by treating

them with respect, dignity and fairness.

ACCOUNTABILITY

Taking responsibility for individual and

team actions, decisions and results by

establishing clear plans and goals and

measuring progress against them.

EXCELLENCE IN PERFORMANCE

Setting goals beyond the best,

reinforcing high-quality performance

standards and achieving excellence by

implementing best practices.

Scope and contents

The scope of this Report

CONTENTS

this Integrated report, published in

2013 Highlights

2

line with the King Code on Corporate

About SAA

4

governance (King iii of 2009), reviews

Operational Overview

8

South African airways (saa) economic,

social and environmental performance

for the period between 1 april 2012

and 31 march 2013. this report

combines elements of a sustainability

report with a conventional financial

report. The aim is to provide sufficient

insight to enable stakeholders to

LEADERSHIP

Board of Directors

12

Group Executive Committee

16

LEADERSHIP STATEMENTS

Chairperson¡¯s Report

18

Chief Executive Officer¡¯s Report

20

form a comprehensive VIEW of the

SAA¡¯S OPERATIONS

organisation¡¯s performance and its

Commercial

24

ability to create and sustain value, in

Cargo

26

the context of ITS environmental, social

Human Resources

28

and economic challenges.

SUSTAINABILITY REPORTS

Group Environmental Affairs

32

Corporate Social Responsibility

34

CORPORATE GOVERNANCE

Corporate Governance and Accountability

36

SUBSIDIARY REPORTS

Mango

40

SAA Technical

42

Air Chefs

44

South African Travel Centre

46

ANNUAL FINANCIAL STATEMENTS

Statement by the Company Secretary

51

Directors¡¯ Report

52

Report of the Audit Committee

66

Independent Auditors¡¯ Report

68

Consolidated Statement of Comprehensive Income

70

Consolidated Statement of Financial Position

71

Consolidated Statement of Changes in Equity

72

Consolidated Statement of Cash Flows

74

Notes to the Financial Statements

75

Corporate Information

127

south african airways group INTEGRATED report 2013

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2013 Highlights

SUPPORT FOR SOUTH AFRICA¡¯S NATIONAL DEVELOPMENT AGENDA

? The airline contributes R8,6 billion to South Africa¡¯s GDP and is responsible for

35 000 jobs

? An additional R11 billion in catalytic demand impact on tourism and an additional

44 000 South African jobs created in tourism

STRATEGIC

? Compilation and submission to the Shareholder (the Department of Public

Enterprises) of SAA¡¯s first-ever comprehensive and holistic Long-Term Turn-Around

Strategy (LTTS) developed by Executives under the guidance and leadership of the

Board

? Skills development Key Performance Indicators achieved for cadet pilots and

technicians

? Three new African routes introduced: Cotonou (Benin), Abidjan (Ivory Coast) and

Brazzaville (The Republic of the Congo)

COMMERCIAL

? Strengthened alliance and code-share relationships

? SAA achieved an overall 12% sales revenue increase

? Skytrax Award for Best Airline in Africa for the 10th consecutive year

? Four-star Skytrax rating reconfirmed

OPERATIONAL

? SAA achieved a 91,17% on-time performance average and won the FlightStats

On-Time Performance Service Awards in the category ¡°Middle East and Africa

Major Airlines¡±

FINANCIAL

? Total income up 14%

? Controllable costs up 5%

? Average rand/USD exchange rate of 8.42 (2012: 7.48) and average Brent oil price

USD 111.80 (2012: USD 113.70)

? Cost savings against budget in excess of R1 billion

? Irregular expenditure down 59%

? Operating loss before interest, tax, depreciation and amortisation improved by 40%

? R5 billion Government guarantee received

2

south african airways group INTEGRATED report 2013

2013 Highlights

SAA, Africa¡¯s most awarded airline, Operates its

core business in three distinct markets:

Domestic

SAA and Mango have the most extensive schedules, enhanced by their partnerships with state-owned regional carrier

South African Express and the privately owned SA Airlink, which operates as a feeder network linking smaller towns

and regional centres to the main hubs in the country. Additionally, SAA moves 40% of all air cargo in South Africa.

REGIONAL

SAA is one of the leading carriers in Africa, offering 26 routes across the continent.

INTERNATIONAL

SAA¡¯s international network creates links to all major continents from South Africa through direct routes. saa

accounts for approximately 35% of all international arrivals to South Africa and through its Star Alliance membership

offers 21 900 daily flights serving 1 329 airports in 194 countries.

south african airways group INTEGRATED report 2013

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