Goodbye SA Express – final liquidation order granted

 ·14 Sep 2022

The South Gauteng High Court has delivered a final liquidation order for embattled local regional airline, SA Express. The order was handed down without any opposition.

The proposal for final liquidation was brought forward by the provisional liquidators, who said that there were no prospects for the business to be saved.

SA Express has been grounded since the airline went into provisional liquidation in April 2020 after failed attempts to rescue the business. Multiple attempts have been made over the last two years to sell the business, but these fell through.

The most successful attempt to save the airline was a consortium of employees banding together to acquire the group’s tangible assets for around R50 million. However, in July 2022, the Air Services Council cancelled the airline’s licences, leaving it with no tangible assets. Meanwhile, the airline’s liabilities were approaching R1 billion.

When the airline first entered into provisional liquidation, the contracts of 600 workers were terminated – and many were left without pay owed to them.

Speaking after the ruling on Wednesday (14 September), secretary general of the Dynamic People’s Union of South Africa (Dypusa), Mashudu Raphetha, said that the order was bittersweet for workers who had hoped to return to the airline – but had been suffering without the payout of money owed.

“Today marks the saddest day of the aviation sector. We were hoping the aviation sector would grow in leaps and bounds – but it’s a situation that we regret: those who hoped to come back to work for SA Express (won’t be able to). The final court order has been granted. It’s a sad day,” he said.

Raphetha said that the government let workers down by not intervening in the matter.

“We believe that the government should have done better. We’re disappointed that, to date, the government didn’t intervene. The government had the capacity to intervene – they have money. Somebody with a war chest – capital – was supposed to come on board. As a union, we are a newly formed trade union. We did not have the financial resource to save this,” he said.

Raphetha said that the positive spin on the order for workers is that, at least through the liquidation, workers would get what little is owed to them. In the long term, however, he said that the liquidation of SA Express would compound the unemployment crisis in the country and add more pressure to the aviation sector.

The liquidation of SA Express follows closely on the closure of local airline Comair in June.

Comair shuttered in June 2022 after failing to secure the necessary funding to pull it out of financial straits, leading to its business rescue practitioners (BRPs) saying there was no longer any reasonable prospect that the company could be rescued.

Comair, which operated and was the domestic partner for British Airways in South Africa, cancelled all flights on 1 June, less than three months after being grounded by the regulator over a series of safety incidents that required diversions and emergency landings.

The group went into business rescue in May 2020 after Covid-19 pandemic-era lockdowns, travel bans, as well as rising fuel prices, wreaked havoc on the travel industry. The airline resumed flights in December 2020 while still in business rescue.

The local aviation industry was left scrambling in the wake of the closure, contending with a loss of around 40% capacity and rising fuel prices at the same time. The combined effect saw ticket prices shoot up by as much as 50%.

While the sector has stabilised slightly in the last month, ticket prices remain elevated in South Africa.

Read: How much it costs to fly South Africa’s most popular routes right now

Show comments
Subscribe to our daily newsletter