‘New’ SAA licences under scrutiny

 ·19 Sep 2022

The newly ‘refreshed’ South African Airways is under the scrutiny of the Air Services Licensing Council (ASLC), which says that the embattled airline’s relaunch project may be in breach of the Air Services Licencing Act.

SAA confirmed receipt of a letter from the ASLC in August 2022, seeking information from the airline so it could ascertain its compliance and/or non-compliance with the act.

Responding in a written parliamentary Q&A on Friday (16 September), the Department of Public Enterprises said that SAA is on a time limit to comply with the request and needs to do so within 90 days. It has committed to do this within 60 days, however.

The department stressed that neither the airline’s operations nor its deal with Takatso to rebuild the business would be impacted.

“The matters raised in the letter by the ASLC are being addressed by SAA and will be provided to the ASLC within or before the 90-day period as prescribed.

“Some of the issues are administrative in nature, relating to SAA’s interaction with the ASLC, the submission of financial statements and internal staff movements. With regards to the Takatso deal, this is being negotiated by the government as the shareholder.

“The questions raised in the letter do not impact SAA’s current and future operations as well as the quality of the services provided by SAA. To that end, both local and regional services are continuing uninterrupted,” it said.

The ASLC’s scrutiny of SAA’s operations comes amid two major findings by the group which impacted local airlines. SA Express entered into final liquidation last week after the South Gauteng High Court issued the order unopposed.

SA Express had been grounded since the airline went into provisional liquidation in April 2020 after failed attempts to rescue the business. Multiple attempts had 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.

Meanwhile, Mango – another state-owned airline under SAA – has also had licencing issues with the ASLC.

The council has also suspended Mango Airlines’ air service licence, although this is for up to two years while the group’s business rescue process plays out. Prospects for Mango are looking more positive, with the airline having been approached by an as-yet-unnamed company to take over operations.

South Africa’s airlines have been under extreme pressure following years of thin margins and riding out the Covid-19 pandemic.

The liquidation of SA Express was the latest blow to the sector and follows the closure of local airline Comair in June.

Read: As SA Express is grounded for good – eyes turn to another troubled airline

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