Mango, the state-owned low-cost airliner that is struggling to stay afloat in the absence of fresh government money, was back in the skies on Wednesday night after a payment dispute with SA’s airport operator briefly saw it stop operating, leaving customers stranded.
Early on Wednesday, Airports Company SA (Acsa), blocked the airline from using its facilities due to non-payment of landing and parking fees, leaving hundreds of passengers scrambling to look for alternative flights. Their flights were cancelled without notice as Acsa tightened the screws.
Mango, which is in the throes of a liquidity crisis and is due to cease operations on May 1 pending government assistance, eventually reached an agreement with Acsa that allowed it to resume flights.
“The airline has made part payment today [Wednesday] towards the amount owed for landing fees, parking fees and passenger service charges,” Acsa said. It did not divulge how much Mango owes.
The airline had made further undertakings to settle the remaining debt.
Acsa, which stood out among state-owned enterprises by being self-sufficient before the outbreak of Covid-19 plunged aviation into an unprecedented crisis that left its airports empty, said its approach to dealing with Mango was consistent with how it handled similar issues with other airlines. It said details of contracts “remain confidential”.
In March, Acsa reported a loss of close to R1.5bn in the first half of its financial year, from a profit of R125m, as revenue plummeted to just R685m from R3.5bn. Its finances were whacked when clients such as BA operator Comair went into distress due to the lockdown and the closure of international and provincial borders.
Mango, a subsidiary of bankrupt state-owned airline SAA, which is grounded, operates a small fleet of 14 Boeing 737-800s around SA and into the region.
Last week, the department of public enterprises said it was in discussion with the Mango and SAA boards about repositioning the national carrier’s subsidiaries in light of delayed government funding. The delay means Mango has to stop operating from May 1 and go into business rescue until July while it waits for funding.
SAA has been in business rescue, a form of bankruptcy protection where administrators take over the company and work out whether it can be saved, since December 2019.
Department of public enterprises spokesperson Richard Mantu previously said Mango was expecting funds from the government as part of the R10.5bn allocation made to SAA in October’s medium-term budget policy statement. However, for SAA subsidiaries Mango and repair and maintenance unit SAA Technical to get the planned R2.7bn of this would have required a special appropriation bill that has not yet been passed in parliament.
It emerged on Wednesday that SAA Technical, which provided maintenance services to commercial airlines before losing the confidence of major clients, is set to retrench at least 60% of its 2,000 employees. Trade union Solidarity said it had received retrenchment notices inviting parties to consult on possible redundancies.
“We can confirm that the CCMA [Commission for Conciliation, Mediation and Arbitration] has been requested to facilitate the talks between workers and the company,” the union’s organiser, Derek Mans, said.
The company had to cut staff pay by 25% in September.
Update: April 28 2021
This story has been updated with the latest developments.
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