Gordhan: SA Express flights to take off next week

Grounded SA Express will be ready to take off next week, says Public Enterprises Minister Pravin Gordhan.

He was briefing the portfolio committee on public enterprises in Parliament on Wednesday, on the progress made in addressing governance challenges at various state-owned enterprises.

Speaking on SA Express, which was grounded on May 24 after the South African Civil Aviation Authority (SACAA) suspended the entity’s air operator certificate, Gordhan said that the airline is now in a “happy situation” as all processes to get it flying again have been concluded.

READ MORE: SA Express suspends operations over ‘serious safety risks’ from today

“The first flights will begin next week,” Gordhan told MPs. Gordhan said that the airline plans to initiate two routes next week and possibly add more routes on a weekly basis.

SACAA recently reinstated the certificate and SA Express has permission to fly two aircraft. According to the department’s presentation, once operations at the airline resume, it will build on its flight schedule.


Gordhan also expressed gratitude toward the new interim CEO Siza Mzimela who took on the position “free of charge”, volunteering to help turn around the situation at the airline. Previous interim CEO Matsietsi Mokholo took a position in the presidency. The new board is tasked with recruiting a permanent CEO and CFO.

READ MORE: Siza Mzimela appointed acting CEO of struggling SA Express

The airline is still facing liquidity and solvency challenges. Government has provided SA Express with a guarantee of R1.74-billion – but the department has warned that immediate recapitalisation is required.

SA Express is also finalising its annual financial statements for the 2016/17 and 2017/18 financial years, due to going concern challenges.

Among the other challenges are the high cost structure of the airline as well as the grounding, which impacted revenue generation. There are also a high level of corrupt and dubious contracts which have been identified.

Over the past five months, the airline has been working on renegotiating unfavourable contracts with suppliers, reducing employee costs, renegotiating better fuel rates and will be working on a need commercial agreement with SAA.

Gordhan spoke about the consolidation of the three airlines SAA, SA Express and Mango to save costs and ensure their sustainability.

The first step of consolidation has taken place with SAA having moved back to the department of public enterprises. Now all airlines will account to one department, said Gordhan.

READ MORE: SAA, SA Express merger ready for lift-off

The boards of the airlines are looking to address technical, fuel and route rationalisation, Gordhan explained. — Fin24

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com

Related stories

SAA 2.0 hopes to start lean and grow from next year

Draft agreement document spells out that R1.5-billion will be needed to fund severance packages for 2 400 of the airline’s employees

ConCourt settles the law on the public protector and interim interdicts

The Constitutional Court said it welcomed robust debate but criticised the populist rhetoric in the battle between Busisiwe Mkhwebane and Minister Pravin Gordhan

Sell assets or create a new airline? Tussle over SAA future intensifies

The department of public enterprises is concerned that the proposed sale of assets threatens its plans to engineer SAA 2.0

‘SAA 2.0’: New deal provides a lifeline

Airline brought back from the brink as rescue practitioners and Gordhan agree to work on a rescue plan by the end of June

Uncertain future for domestic airlines

The uncertainty of a post-Covid-19 airspace makes it even more difficult for the airline industry to forecast its recovery

SAA crash-lands but new airline will take off

During discussions between unions and business rescue practitioners and the government, it was decided that the national carrier would be closed and a new airline formed
Advertising

New education policy on gender violence released

Universities and other higher education institutions have to develop ways of preventing or dealing with rape and other damaging behaviour

Cambridge Food Jozini: Pandemic or not, the price-gouging continues

The Competition Commission has fined Cambridge Food Jozini for hiking the price of its maize meal during April

Sekhukhune’s five-year battle for water back in court

The residents of five villages are calling for the district municipal manager to be arrested

Vaccine trial results due in December

If successful, it will then have to be manufactured and distributed
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday