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SAA Subsidiary Mango Airlines to Cease Operations May 1
The COVID-19 pandemic will be claiming another airline with South Africa’s Mango Airlines, beset by financial woes, on the brink of collapse effective May 1, until such a time the airline receives funding from the government.
The airline’s CEO, William Ndlovu, informed his staff in an internal memo dated April 22 that the government had been asked to support decisions by both Mango’s Board and the interim Board of parent company South African Airways to put the beleaguered airline into business rescue after the airline was unable to obtain further funding to keep it airborne.
This is in regards to the government’s earlier commitment in which Mango’s executive management and interim board had been in talks for a taxpayer-funded bailout for the airline which did not materialize. The bailout fund from the government was to be allocated in October 2020 at the latest, and Mango Airlines had used this promise as leverage from the government to convince creditors to add an extension until January 2021 for repayments.
“We engaged with all the creditors and requested that we be given up until January 2021 to settle what is due to them, and this was granted. However, due to reasons unknown to us, we did not receive the funds in January 2021. We engaged the relevant stakeholders and were told to wait, maybe in February 2021, the money will come, and we are now In April, with no sign of money. At the beginning of April 2021, we were then informed that Mango will only receive funds in June 2021. This put Mango in a difficult situation as it relates to further extension from the creditors who could not wait any longer to be paid,” Ndlovu wrote in the memo.
The details of further payments to its subsidiaries having not yet been worked out has led the airline to a cash crunch, just like its mother airline, South African Airways, with payments from the government now being promised for June.
“The lessors then put an ultimatum to Mango that should they not receive their money by April 30, 2021, then all their aircraft must be grounded until such time that Mango receives the funds and can pay. We have been told by the shareholder that there will be no money received by Mango until June 2021. This means that Mango will not be able to operate from May 1, 2021, due to no aircraft being available for operations,” Ndlovu wrote.
“Therefore, it is with great sadness that I inform you that our operations will temporarily stop from May 1, 2021, until such time we receive funding or complete the business rescue process should it be supported by DPE,” the memo concluded.
Mango Airlines is South African Airways’ low-cost carrier and flies between South Africa’s major airports, offering air services between the cities of Johannesburg, Cape Town, Durban and Port Elizabeth. The airline also operates flights between Johannesburg and Zanzibar in Tanzania as its international operations, serving all those who love island living.
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