Fly SAX turns to venture capitalists for assistance in funding a take over. Image via Pixabay
SA Express suspends operations amid COVID-19 outbreak
Initial proposals to ground the airline, as a result of its poor financial position, have been made final due to the coronavirus.
Fly SAX turns to venture capitalists for assistance in funding a take over. Image via Pixabay
Cash-strapped airline, SA Express, announced that all flights would be suspended from Wednesday 18 March ‘until further notice’.
The airline, which has recently suffered dire financial losses resulting in business rescue administration, is the latest South African business to be grounded by the coronavirus pandemic. Coincidentally, the suspension of all operations was originally tabled by business rescue practitioners (BRP) before the first coronavirus case was registered in the country, two weeks ago.
The proposal by BRPs, Phahlani Mkhombo and Daniel Terblanche, was criticised by the Department of Public Enterprises, which described the strategy as a “wholly inadequate” measure to facilitate a financial turn-around.
Coronavirus ‘state of disaster’ hits travel industry hard
The ‘state of disaster’ declared by President Cyril Ramaphosa on Sunday, which holds especially serious ramifications for the travel industry, could likely be the final nail in SA Express’ coffin, with Mkhombo and Terblanche’s initial suggestions, although highly controversial, now being an inevitability.
The indefinite grounding of SA Express has dealt another blow to the already-embattled state of South African aviation. The national carrier, South African Airways (SAA), has also been brought to its knees in recent months and, as a result of both financial and operational constraints, was placed under business rescue in early December 2019.
SA Express offers alternative flights to customers
While the coronavirus outbreak in South Africa has clipped SA Express’ wings, the pandemic may actually have a ‘positive’ effect on SAA, as a result of, amongst other things, a drop in overhead costs, according to BRP Siviwe Dongwana.
While the national carrier limps ahead into an uncertain future, offering refunds on international flights, SA Express has confirmed that staff and customers will be affected in the following manner:
- All customers will be accommodated on alternative flights
- All non-critical SA Express staff will be placed on compulsory leave during this time
Despite the grim prospects of SA Express’ grounding, the airline notes that the suspension of operations will allow it time to get its house in order, saying:
“The airline will utilise this period to review its current network and streamline operations for improved efficiency.”
The airline further added that all customers who had booked SA Express flights would be contacted in ‘due course’.
