The future of SAA-owned LCC, Mango, is still not clear and its business rescue practitioner (BRP), Sipho Sono, is now taking the Minister of Public Enterprises, Pravin Gordhan, to court alongside the Department of Public Enterprises, South African Airways Soc Ltd, the Minister of Finance, the National Treasury, the International Air Services Council and the Air Services Licensing Council, asking the court to compel the Minister to make a decision on the disposal of Mango by selling it to a still unnamed investor, as an outright sale.
The BRP said Mango had submitted the application for the approval of the Minister in September 2022. “Basically, the DPE has been abusing the Public Finance Management Act (PFMA),” alleged Sono in an interview on eNCA last week.
He alleged that the Minister was “buying time” and decided to go to court to compel the Minister to take a decision for or against approval.
Sono pointed out that when the BRP was signed off by SAA in December 2021, it included the decision for Mango to be disposed of. Now that the process had come to its end, said Sono, there was additional information required by the DPE, the shareholder of SAA.
According to Sono, among the items of information that are now required by Minister Gordhan, is for SAA to effectively review the business plan of Mango. “This is the business of the new owner – that kind of approach, clearly, is anti-competitive. There is no way that a potential competitor to SAA will present its full business plan for review by SAA!”
So far, the business rescue process has cost South African taxpayers about R40 million (€2.1m), plus there is a salaries bill of around R500 000 (€26 144) per month for the skeleton staff that have remained. Sono pointed out that the cost of the litigation would swell the taxpayers’ burden.
The inclusion of the two air services licensing councils, both international and domestic, as defendants implies that Mango’s route rights are involved in the court case. Mango was the only carrier that had rights to conduct direct scheduled flights from Johannesburg to Zanzibar. These are believed to have been profitable services, and have long been seen as the only jewel in the dormant airline’s crown. It’s interesting to note that FlySafair has just been given rights to fly JNB-ZNZ thrice weekly.
