{"id":337867,"date":"2019-08-30T11:07:39","date_gmt":"2019-08-30T09:07:39","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=337867"},"modified":"2019-08-30T11:07:39","modified_gmt":"2019-08-30T09:07:39","slug":"sa-express-remains-grounded-due-to-operational-difficulties","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/337867\/sa-express-remains-grounded-due-to-operational-difficulties\/","title":{"rendered":"SA Express remains grounded due to &#8216;operational difficulties&#8217;"},"content":{"rendered":"<p>Parliament&#8217;s portfolio committee on public enterprise met with South African Express on Friday (30 August) to probe the current crises relating to the nationwide grounding of flights.<\/p>\n<p>In a <strong><a href=\"http:\/\/www.flyexpress.aero\/blog\/2019\/08\/29\/sa-express-apologises-its-customers-working-hard-find-speedy-resolution-its\" target=\"_blank\" rel=\"noopener noreferrer\">statement<\/a> <\/strong>on Thursday, the airline said that all of its flights had been cancelled as it is dealing with &#8216;operational challenges&#8217;.<\/p>\n<p>Interim CEO Siza Mzimela told the committee that the grounding of flights can be attributed to the various historic challenges facing the airline.<\/p>\n<p>The committee heard that these include a weak balance sheet, frozen credit lines, liquidity challenges, long outstanding debt and a significant monthly cash bill.<\/p>\n<p>This resulted in low staff morale, a high number of management vacancies and a lack of accountability.<\/p>\n<p>A number of contracts were also found in the system done via third parties, which resulted in additional costs to the airline.<\/p>\n<p><strong>Debt<\/strong><\/p>\n<p>The committee heard that the R1.2 billion re-capitalisation received in February 2019 was ring-fenced to settle government-guaranteed debt only and was not nearly enough to cover the operations of the Governance, Profitability, Operational Efficiency, Customer Value Proposition and Human Capital (G-POCH) strategy adopted by the new board.<\/p>\n<p>The airline was thus left with no working capital, since RMB bank, subsequent to settling the debt using the recapitalisation funds, pulled the overdraft facility.<\/p>\n<p>Acasa\u2019s action of grounding the flights is thus attributed to South African Express&#8217; inability to pay the legacy debt of around R71 million.<\/p>\n<p>In addition, whilst the airline is able to secure an overdraft facility of R300 million, this is subjected to government guarantees the committee heard.<\/p>\n<p>SA Express aid that the situation is receiving urgent attention, as its board is currently engaging with ACSA management, as well as the Department of Transport.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/government\/328745\/saa-gets-more-state-funds-after-ceo-and-chairman-quit\/\" target=\"_blank\" rel=\"noopener noreferrer\">SAA gets more state funds after CEO and chairman quit<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Parliament&#8217;s portfolio committee on public enterprise met with South African Express on Friday (30 August) to probe the current crises relating to the nationwide grounding of flights.<\/p>\n","protected":false},"author":10,"featured_media":247029,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-337867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/337867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=337867"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/337867\/revisions"}],"predecessor-version":[{"id":337887,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/337867\/revisions\/337887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/247029"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=337867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=337867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=337867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}