Deputy minister of Public Enterprises Phumulo Masualle says there is still a commercial case for SA Express, and that it can play a critical role as a feeder airline to service secondary routes and key cities in the Southern African region.<\/p>\n
Masualle said this after engaging the business rescue practitioners of SA Express, which was placed under business rescue on 6 February 2020 by an order of the Johannesburg High Court.<\/p>\n
The business rescue process was as a result of legal action undertaken by service provider Ziegler.<\/p>\n
The service provider, whom SA Express had contended in its responding papers to the legal action, had been engaged irregularly by the previous management of the airline.<\/p>\n
Masualle expressed his concerns about the prospects of job losses at SA Express, as stated by the South African Transport and Allied Workers Union (SATAWU).<\/p>\n
The Department of Public Enterprises had tasked the SA Express board to seek a Strategic Equity Partner (SEP) to provide working capital in December 2019, due to continued funding requirements at the airline.<\/p>\n
This was despite a government injection of R1.5 billion into the airline in the last two years.<\/p>\n
The business rescue process interrupted the board process to seek a lifeline.<\/p>\n
\u201cThe key issue in the business rescue process that needs to be resolved is the provision of the Post Commencement Finance (PCF) for the airline to enable continued operations.<\/p>\n
“The department is hopeful that the business rescue practitioners will be able to raise the PCF,\u201d said the department.<\/p>\n
SA Express, which falls within the ambit of the DPE, offers connectivity between primary and secondary domestic destinations in South Africa and five other Southern African Development Community countries.<\/p>\n