Operations of ailing SA Express ‘continue as normal’
Despite contesting being put into business rescue, the airline says the process is well co-ordinated with no disruptions to customers and employees
Ailing carrier SA Express, which became the second state-owned airline to be put into business rescue a week ago, says all its operations are continuing as normal.
“The business rescue process is well co-ordinated with no disruptions to customers and employees,” airline spokesperson Mpho Majatladi said on Thursday.
The company was placed in business rescue by South Gauteng high court judge EF Dippenaar last week Thursday for failing to settle its debt of R11m to global logistics firm Ziegler.
The business rescue process is aimed at rehabilitating a financially distressed company by restructuring its affairs including debt, among other things.
In September 2019, SA Express received a government bailout of R300m to ease its operational and financial challenges. In 2018, it was granted a R1.2bn guarantee, which the airline reportedly said was swallowed by historical debt.
On Thursday, Majatladi said the SA Express board and executive committee will continue to “protect this national asset by pursuing and laying charges against those embroiled in malfeasance, irregularities and contraventions of the Public Finance Management Act”.
The SA Express contract with Ziegler was an agreement to provide a range of services, including cargo management, customs clearing services and inventory, and supply chain management.
The airline, however, has previously argued that there was no need to place it in business rescue because the contract with Ziegler, which was signed by former CEO Inathi Ntshanga in 2017, was irregularly obtained and had raised red flags when reviewed by the new management.
SA Express has said it will appeal the decision to place it in business rescue because the court “went over and above what it was required and granted orders not sought by the applicant”.
Majatladi said that while the manner in which the introduction of the business rescue process occurred “is unfortunate, this now provides the environment to facilitate the conclusion of initiatives that had already been initiated by the board and executive team”.
She said that in just less than 24 months, the board of directors and executive team worked “tirelessly” to rebuild operations and reinstate governance structures, while implementing the airline’s “robust turnaround strategy”.
“SA Express continues to affirm its critical importance to SA’s developmental objectives through its expansive aviation value chain which impacts multiple industries,” said Majatladi.
“At route level, SA Express makes a positive contribution and is an invaluable strategic national asset whose mandate includes economic development and job creation that is desperately needed in the country.”