1. Report to Select Committee on Monitoring
of SAA’s Restructuring - 10 September 2007

2. Summary
The Problem
The Seabury Transformation Strategy
Profitability Bridge
Projected Profitability
Monitoring by DPE/Treasury
Summary of Restructuring Progress
Responsibilities for Restructuring Initiatives
Top 10 Initiatives Update
Highlights SAA Actual Results to 31 July 2007
Key Risks and Consequences

3. Profit (Loss) before Tax Gap
The Problem
Profit (Loss) before Tax Gap
Minimum of ZAR 2.7 billion improvement needed

4. The Seabury Transformation Strategy
Global initiatives
Revenue initiatives
747 elimination
HQ staff reduction
Operational performance
improvements
Partner relations
Point of sale share gap
Pricing actions
SAA
restructuring
Cost reduction
Removal of duplication of
functions
Accountability
Contract review
Labour concessions
Departmental initiatives

5. Profitability Bridge
Profitability Bridge
ZAR millions
ZAR 2.7 billion

6. Projected Profitability
After restructuring, the Transformation Plan provides targeted profitability
Profit-Before-Tax Comparison

7. Monitoring by DPE/Treasury
Inter departmental co-ordination
Monthly restructuring SAA reporting format agreed highlighting
Performance
Progress of main restructuring initiatives
Monthly reports to DPE and National Treasury
Meetings June, July and August
Monthly meetings scheduled
September, October and November
Board sub-committee minutes provided to shareholder

8. Summary of Restructuring Progress
Benefit realisation is largely on-track
“over recovery of benefits on some initiatives making up for
initiatives that are behind schedule”

9. Responsibilities for Restructuring Initiatives
Ongoing Must be delivered
Annualised during 07/08
Improvement financial year
__________________R million_____________________ HR
Operations
Finance
SAAT
Cargo
Commercial
Total 2, ,236

10. Top 10 Initiatives Update
Description
Annualised Saving
Timing
SAA
Status
Labour - management
62%
Nov 07
Yellow
Labour - gap
Jan 08
Green
B747 grounding
Aug 07
Regional partnership revenues
17%
Mar 08
Red
GDS contract renegotiation
Sep 07
Advertising and promotions
16%
Jun 07
Blue
Market share revenue gap - Europe and domestic
Additional revenue in lieu of sponsorships
Engine renegotiations 5%
Operational performance
Top 10 initiatives 82% of full restructuring
100%
Completed
Blue
On track
Green
On track but issues to be addressed
Yellow
Behind or unable to generate monetary value
Red

11. Highlight SAA Actual Results to 31 July 2007
Operating results ahead of budget
Revenues better than expected
Costs contained
Slippage in timeframe of expected labour related savings

12. Key Risks and Consequences
Additional competition from Emirates
Expect revenue impact once Emirates commence services
Uncertainties
Worldwide credit market crisis
High oil prices
Labour concessions