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BL Premium reports that SA Airways (SAA) interim CEO Thomas Kgokolo has indicated that Mango Airlines, SAA’s low-cost subsidiary, will be placed in business rescue.
He advised on Monday that the decision was taken by the airline’s board and the government, and consultations with unions on the matter were ongoing. The airline has yet to be granted approval by the courts to be placed in business rescue in line with the Companies Act. The National Union of Metalworkers of SA (Numsa), the SA Cabin Crew Association (Sacca) and the Mango Pilots Association on Monday filed an application in the High Court in Johannesburg seeking business rescue for Mango to avoid the state-owned airline from being liquidated. The parties want to have the application heard on an urgent basis in August before the liquidation application by two of Mango’s creditors, Aergen Aircraft Four and Aergen Aircraft Five, is heard. In a statement, the unions said they want Ralph Lutchman from Concord Administrators to be the business rescue practitioner (BRP). Mango and SAA have not yet identified a BRP. Should the ailing SAA subsidiary undergo business rescue as well as receive the R819m due to it from the government, it could return to profitability by 2024, according to a Mango financial sustainability report. Mango estimates that should it introduce reforms over the next two years, such as reducing its staff complement and its ground handling costs, as well as its IT costs, it could make a profit of R97m in 2023 and R146m in 2024. Mango has been in dire financial straits since the start of the pandemic due to the grounding of its parent company SAA, which was placed in business rescue, as well as the ongoing challenges in the domestic aviation industry brought about by Covid-19. Mango’s more than 700 employees have not received their full salaries for June and July and are owed at least six months’ pay.
- Read the full original of the report in the above regard by Thando Maeko at BusinessLive (paywall access only)
- See too, Mango unions grew tired of govt promises, filed for business rescue, court documents show, at Fin24
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