SACAA Annual Report 2022_23

PART B I Performance Information

3.3 Revenue Overview 3.3.1 Overview of the SACAA’s Financial Standing The SACAA’s financial position improved significantly during the financial year. The main revenue stream of the SACAA remains the passenger safety charge, driven by passenger numbers. Passenger numbers continued to recover during the current year as the impact of COVID-19 receded, although the numbers remained 26% below pre-COVID levels. The SACAA also received continued financial support from its Shareholder, the Department of Transport, to assist the entity to continue with the uninterrupted delivery of its mandate. Most cost-containment measures directed at discretionary expenditure items were maintained during the year, and only critical vacant positions were filled, resulting in significant savings against the budget. Renegotiation of leases and other contracts also contributed significantly to the savings. The SACAA reported a net operating surplus of R89.2 million for the year ended 31 March 2023, compared to a budgeted surplus of R1.4 million. The positive variance of R87.8 million is the net result of the following: • R21.8 million positive variances in revenue • R28.0 million positive variance in personnel costs • R38.0 million positive variance in other operating costs. The variances reported above are the result of the revised Estimates of National Expenditure (ENE) budget for the 2022/23 financial year, as approved by the SACAA Board’s Audit and Risk Committee and submitted to National Treasury (NT) during the ENE process in December 2022.

The revised ENE budget reflected the expectation of a small surplus of R1.4 million for the 2022/23 financial year after financial support of R187.9 million (2021: R277.5 million) was received from the Department of Transport (DoT) as part of the adjusted ENE 2022/23 process. The DoT committed to additional baseline support of R269.1 million over the Medium-Term Expenditure Framework (MTEF) period. 3.3.2 Passenger Numbers and SACAA’s Passenger Safety Charge The SACAA is a self-funded public entity that relies on a combination of revenue streams to fulfil its mandate and run its business operations. The revenue streams consist mainly of the passenger safety charge (PSC), user fees, the fuel levy, and funding from the Department of Transport for investigating aircraft accidents and incidents. Additional financial support of R187.9 million (2021: R277.5 million) was received from the Department of Transport for the 2022/23 financial year due to the financial impact of the SACAA’s lower passenger numbers caused by the pandemic. The total passenger numbers for the 2022/23 period amounted to 16 550 895, compared to the estimated budget of 16 000 000. This is 3.4% higher than budgeted and 49.3% higher than the same period last year, but still 25.7% lower than pre-COVID (2019) levels. Passenger numbers increased as the impact of COVID-19 receded. The President announced the end of the South African COVID-19-related State of Emergency with effect from 5 April 2022. On 22 June 2022, all remaining health regulations and restrictions introduced to manage the pandemic were repealed, and passenger numbers recovered significantly during the financial year.

44 I Annual Report 2022/23 I Performance Information