Government could merge SAA, Mango, and SA Express

The government will consider a proposal to merge South African Airways, Mango, and SA Express.

Presenting in parliament on Wednesday 11 September, the Department of Public Enterprises said it has completed a study on the merger of the country’s state-owned airlines.

The study found that that a merger would be beneficial and would lead to greater cost savings.

It added that the document which supports the consolidation is currently being reviewed by the government’s economic cluster and would soon head to cabinet for consideration.

Acting Interim CEO of SA Express, Siza Mzimela, said that she fully supported the integration of the airlines, but stressed the importance of how the merger is put together.

Bailout

The decision follows the news that the National Treasury has approved a R300-million bailout for the struggling SA Express.

The airline received a R1.2-billion re-capitalisation in February 2019, however, this was ring-fenced to settle government-guaranteed debt only and was not nearly enough to cover the operational strategy adopted by the new board, said Mzimela.

SA Express was thus left with no working capital, since RMB bank, subsequent to settling the debt using the recapitalisation funds, pulled the overdraft facility.

These issues meant that the airline was forced to ground all of it flights at the end of August as it desperately sought financing.

Source: BusinessTech

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Government could merge SAA, Mango, and SA Express