Mango Airlines, the low-cost arm of state-owned South African Airways (SAA), will be placed into business rescue, says SAA interim chief executive Thomas Kgokolo.
Speaking to ENCA on Monday (26 July), Kgokolo said that the decision was taken by Mango’s board and the government, adding that consultation with labour groups was underway.
The interim chief executive said that some Mango staff are still awaiting delayed salaries and that this issue should be addressed in the coming weeks as part of a R2.7 billion bailout given to SAA subsidiaries.
SAA exited business rescue in April after a lengthy process that reduced its workforce by almost 80%.
The national carrier has been unprofitable for almost a decade, surviving on state bailouts and government debt guarantees, and was placed under administration a year ago. The airline exited administration after receiving R7.8 billion from the government.
However, it has not yet committed a firm date to recommence operations, promising an announcement in the coming weeks.
The national carrier announced an agreement to sell a majority stake to a local jet-leasing company and private equity firm in June.
A consortium comprised of Johannesburg-based Global Airways – which owns recently-launched domestic airline Lift – and private equity firm Harith General Partners will take a 51% shareholding in the national airline.
The consortium, named Takatso, will invest as much as R3.5 billion over the next three years.
Lift co-founder Gidon Novick and Harith chief executive officer Tshepo Mahloele said that the government will have no further financial obligations to the company, outside of the existing liabilities that they will settle.
“Route networks we are still working on, and it will be a phased rollout based on demand re-emerging post-Covid.”
