SA Express

(SA Express / Twitter)

Gordhan: Embattled SA Express to resume flight service next week

While still facing the process of liquidation, Gordhan confirmed that the airline will resume its flight services next week.

SA Express

(SA Express / Twitter)

Pravin Gordhan, the Public Enterprises Minister, has informed that SA Express will resume flights next week.

On Wednesday, Gordhan briefed the portfolio committee, in parliament, on progress on governance challenges at multiple state-owned enterprises.

On the subject of SA Express, Gordhan shared that, following the suspension of its Air Operator Certificate by the South African Civil Aviation Authority (SACAA) on 24 May, the airline was in a better situation and would start operating flights soon

SA Express ready to take off again

SA Express was recently granted permission to fly two airplanes by SACAA, who reinstated their certificate. The airline plans on progressively adding additional flights to their schedule.

Gordhan stated to MPs that the first flights will begin next week. He also shared that the airline will start off by initiating two routes and then gradually look into adding more routes weekly.

New interim CEO, Siza Mzimela, was shown gratitude by Gordhan. Mzimela had volunteered to take on the challenge of sorting out the airline’s dire situation, free of charge, after previous interim CEO, Matsietsi Mokholo, accepted a position within the Presidency. The new board has yet to appoint a permanent CEO and CFO.

SA Express bailout doesn’t mean all is well for the airline

The airline’s problems are still far from over due to issues regarding liquidity and solvency. Although the government has guaranteed R1.74bn, SA Express has been warned that it comes with the requirement of immediate recapitalisation.

The aviation company is actively working on compiling annual financial statements for the 2016/17 and 2017/18 financial years. Suspicious and corrupt contacts have been found and looked into.

The grounding and high cost structure of the airline have been costly and has had a direct impact on revenue generation.

The last five months have been used productively by the airline as it has been working with suppliers on renegotiating unfavourable contracts and fuel rates as well as the reduction of employee costs. SA Express is also working on a commercial agreement with SAA in the works.

The consolidation of SAA, SA Express and Mango, was also touched on by Gordhan. SAA’s move to the department of public enterprises puts all three airlines in one department. The decision to consolidate is a strategy to not only save costs but to ensure the airlines’ sustainability.