Mango Airlines has suspended all flights and services from Tuesday 27 July and is set to be placed under business rescue.
Acting chief executive William Ndlovu said that the suspension of flights is due to outstanding payments to Air Traffic Navigation Services (ATNS).
Mango Airlines is the low-cost arm of state-owned South African Airways (SAA) and is based at OR Tambo International Airport.
It was launched in October 2006 using a fleet of new generation Boeing 737-800 aircraft, which has a seating capacity of 186.
Mango Airlines has faced financial challenges lately, which saw its planes grounded due to non-payments and debt to Airports Company of South Africa (Acsa).
The Mango board and the government will now place the company in business rescue, and consultation with labour groups are underway.
Speaking to Biznews about Mango’s troubles, SA Flyer’s Guy Leitch said Mango has continued to lose market share since the pandemic started.
“Mango’s share of the pie has decreased from around 40% to nothing at this stage. It’s operating two, possibly three aircraft in total,” said Leitch.
He added that people don’t want to book on Mango because their flights get cancelled so often.
“If the airline is at any risk of cancelling their flights, people are simply going to look elsewhere, particularly in such an intensely competitive market,” he said.
South Africa is a competitive low-cost airline market, with FlySafair, Kulula, and Lyft offering services on popular routes.
“There’s a glut of seats, and there’s price-cutting. So, there’s no real margin opportunity for Mango there either,” Leitch said.
The bad news for Mango ticket holders is that they may join the line of other creditors.
“They’re going to enjoy what the industry so beautifully calls the cold comforts of the concurrent creditor. They’re probably going to get this ghastly haircut,” he said.
Further bad news is that ticket holders and creditors mustn’t expect too much back in compensation, as there may be nothing left to pay.
“SAA concurrent creditors got seven cents out of the rand, and even then, they’re struggling to get by that. I suspect Mango’s concurrent creditors are going to get much the same sort of haircut.”