GIULIETTA TALEVI: Dare you buy a Mango ticket now?
The low-cost airline has proposed it be placed in business rescue until July while it waits for money promised to it
The answer to that question is probably not, for many of the hundreds of passengers who pitched up at OR Tambo and Cape Town airports on Wednesday morning only to find that all flights by the airline — the only flying division of SAA — had been summarily cancelled.
If Mango wanted to win customer trust, its patchy communication on what had happened — and what measures it had taken to honour its passengers tickets — was not the way to go about it.
Mind you, it seems that being cancelled was not just a shock to Mango's passengers, but to the airline itself. “It caught us by surprise. It was all systems go, we were planning to fly our passengers and this happened,” spokesperson Benediction Zubane told CapeTalk.
In reply to the FM, Zubane said that in their discussions with ACSA “we always understood that we could still fly on Wednesday and we didn't foresee this.”
But it shouldn't have been such a surprise. After all, Mango owes the Airports Company SA (Acsa) money and if it hadn’t been a state-owned entity, you can be certain that the airports company would have shown far less leniency than it has done to date and grounded the airline long ago.
It's fairly obvious that a high level intervention was behind Wednesday night's decision by the Airports company to lift its suspension on Mango after it made a partial payment on its debt. Still, Acsa was at pains to stress that its decision “is consistent with our approach to other airlines based on the terms and conditions entered into contractually.”
Strip through this to-and-fro, and it’s clear that Mango is teetering, if not well over the edge already.
Unless the low-cost airline secures money under last year's SAA bailout, it will be unable to pay staff their May salaries. Creditors are lining up, and the airline has proposed it be placed in business rescue until July while it waits for money promised to it.
You’d think that would-be customers must be bailing in their droves. Which is a tragedy, really, considering that, according to Mango, for the month of April, its loads had “stabilised” at above 90% and were “improving”. Yet Zubane also told the FM this week that “surprisingly, we have been realising slightly above normal bookings considering the pandemic and events of the past few days.”
Meanwhile, as the FM wrote in this week’s editorial, another SAA division, SAA Technical is on its knees. A section 189 retrenchment process is set to kick off in which more than half of SAA Technical’s 2019 employees are affected.
The retrenchments were confirmed this week, with the company saying: “it has most regrettably now become necessary to restructure the organisation in line with reduced customer demand.”
The aviation industry has long considered SAA Technical grossly overstaffed — but the division’s importance to local and international aviation is hard to overstate as it services other local carriers, and some of the long-haul operators to SA.
Clearly, it shouldn't have come to this.
For one thing, the business rescue proceedings in which SAA has been involved for an incredible 16 months should have taken into account the financial needs of both Mango and SAA Technical.
That's the subject of this read in Fin24.
That neither SAAT or Mango has received money from last year's bailout is partly because neither were originally specifically included in the business rescue plan signed off by creditors.
Ultimately, however, the fault for the colossal cluster crash at SAA should be laid at the feet of Public Enterprises. Had it left former CEO Vuyani Jarana (who quit in May 2019) to do his job, and supported his funding appeal — however unpalatable then — there's a chance that SAA, and Mango, would not be in as precarious a state as they are, Covid-19 notwithstanding. Had it, after his resignation, swiftly appointed a competent management and board, business rescue might have been avoided.
Instead, the saga simply drags on.
It begs the question whether Public Enterprises Minister Pravin Gordhan, and his DG Kgathatso Tlhakudi have even remotely realistic commercial expectations of the assets in their portfolio, or whether they are prepared to allow decent leaders to grow the companies under their command.
These companies need strong, competent and independently-minded leaders; politics has to be secondary. If the rot that has become horribly apparent in almost every province, town and metro has proved, the government's meddling is strangling the dream of a prosperous SA.
*Talevi is the FM's Money & Investing editor.
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