South African airlines have come under extreme pressure after years of low margins and huge financial losses caused by restrictions imposed during the COVID-19 pandemic. On Wednesday 14 September, the South Gauteng High Court handed down a final decision to liquidate regional airline SA Express.
SA EXPRESS: SLOW AIRLINE DEATH
SA Express has been a key player in South Africa’s aviation landscape, acting as a feeder airline for the national carrier and providing reliable air transport between major hubs and regional airports in South Africa and neighboring states.
The final liquidation of the state-owned carrier this week was the latest blow to South African aviation, which has seen major changes since the start of the pandemic.
SA Express has been out of business since it was previously liquidated in April 2020 following failed attempts to save the business. Over the past two years, several unsuccessful attempts have been made to sell the carrier.
In July this year, the Aviation Board revoked SA Express’s licences, leaving it with no tangible assets. At the same time, the airline’s liabilities approached 1 billion rubles.
READ ALSO: Behind the scenes: SA Express’ return from the brink
THE END FOR SA EXPRESS
The company’s liquidators said in August that there was no way to save the company.
Dynamic People’s Union of South Africa (Dypusa) general secretary Mashudu Rafeta said SA Express workers regretted the final liquidation order.
Its employees, who were suffering without the benefits they were due, hoped to return to the airline.
“Today marks the saddest day in the aviation industry. We had hoped that the aviation sector would grow by leaps and bounds, but this is a situation we regret: those who hoped to return to work at SA Express (will not be able to). The final judgment of the court has been issued. It’s a sad day,” Rafeta told BusinessTech.
What about Mango?
In its address to the portfolio committee on public enterprises on Wednesday, the department provided an update on the status of the Mango business rescue.
On July 28, 2021, the airline entered voluntary business rescue. Business rescue practitioners were allocated R819 million to implement a rescue strategy that involved cutting operations and staff. Ultimately, according to BusinessTech, all employees were either given the day off, resigned, or quit.
According to the department, the unnamed preferred bidder has submitted proof of funds necessary to secure its investment in the airline, with September and October 2022 scheduled to complete the transaction, as well as various regulatory and competitive approvals.
The bid must be approved by shareholders, the government, and there is still a long way to go to determine the airline’s future.
THE GROWTH OF THE COST PER PARAVET
The cost of air travel in South Africa has increased by almost 50% over the past year, as pent-up demand and the closure of several domestic routes have increased pressure on the market.
The closure of Comair in June was a shock to the country, resulting in the loss of around 40% of airline seats in the SA market. British Airways and Kulula were two respected brands that the country did not expect to lose so suddenly.
READ ALSO: SA billionaire set to buy regional state airports
