SA Express employees beat out 16 other interested parties to buy a stake in the troubled state-owned airline.
Amid the overnight, worldwide crash of the air travel industry, a group of retrenched SA Express employees have an ambitious plan to raise R250-million in seed funding to buy the cash-strapped airline.
Employees have tried to get the airline or the shareholder (the department of public enterprises and the national treasury) to pay salaries, but have been left with no income for the past six months. The airline’s 691 employees last received salaries in February, and the plan to buy SA Express is a last-ditch attempt to save their careers in aviation, according to the group’s spokesperson Thabisile Sikakane.
The group plans to raise the seed funding through a start-up crowdfunding platform, Uprise Africa. The group is one of 17 parties that have shown interest in the regional airline, which is currently under provisional liquidation.
The airline’s rescue practitioners were granted a two-month extension by the Johannesburg high court last week for them to conclude talks with potential investors to avoid liquidation.
The decision on whether or not the SA Express employees have won the bid to buy the airline could come as early as next week, according to Sikanane. If approved, the group plans to invite interested investors to invest in the airline through Uprise Africa.
SA Express aircraft have been grounded since March after the rescue practitioners were unable to secure the post-commencement funding required to stabilise the airline while it was undergoing restructuring. In the best-case scenario, Sikanane says the airline’s fleet will be back in the skies by March 2021.
Once the fleet is off the ground, the retrenched employees will be resorbed. However, Sikakane says this will happen incrementally because the airline will “start small” and before hopefully returning to profitability within 12 months.
Sikanane says the team of employees will be leading SA Express “from the front” and will avoid making the same mistakes as the airline’s previous leadership, which was plagued by mismanagement and corruption.
“The team that we have put together comprises SA Express employees who were in senior management at the airline and have years of experience in the aviation industry. We are starting on a clean slate with no historical debt or liabilities,” she says.
The airline’s employees have incorporated a special purpose vehicle company as the acquiring entity that has bid for SA Express assets.
The company will be anchored by a private investor and will be owned by the airline’s employees.
The proposed new airline is a “game-changer”, says Sikanane, because the shared ownership plan will improve “income and wealth distribution but also improve productivity because the employees will now be the owners”.
Thando Maeko is an Adamela Trust business reporter at the M&G