Mango business rescue hits its first speed bump

Mango staff received one month’s salary last week as the beleaguered budget carrier gears into business rescue under State appointed practitioner Sipho Sono of Opis Advisory.

Employees are due the equivalent of 8-months’ pay after voluntary cuts and non-payments for well over a year when the airline’s board was halted from placing it into protection by its shareholder until the recent High Court ruling, a consequence of action taken by organised labour to force an attempt in resuscitating Mango.

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According to a well-placed source in Mango’s senior management, the airline is readying itself to resume operations in October.

This after being grounded for a second time this year, the first by ACSA at the end of April and more recently early August by Air Traffic and Navigation Services. Both instances for non-payment of bills.

By the time of filing this article though, Mango was unable to provide any confirmation of the information shared with The Citizen.

A letter sent to The Citizen by an anonymous staffer seems to confirm the airline’s intention to resume operations.

It reads that “Mango contact centres have been told to resume work from 1 September,” and the employee laments that this instruction was issued despite vast amounts of money that remains unpaid.  

The note angrily asks “Why is Mango Airlines management allowed to abuse these poor people like this? Their flights are not operating, and the employees have not been paid what is due to them, The business Rescue is still in progress. Someone needs to put a stop to this; Mango Airlines cannot continue abusing people like this.”

ALSO READ: Mango airline flies again, as SAA exits business rescue

Meanwhile, the business rescue process seems to have hit its first hiccup.

The threesome of labour organisations, the National Union of Metalworkers of South Africa (NUMSA), The Mango Pilots’ Association and the South African Cabin Crew Association have all objected to the inclusion of Professor Joachim Vermooten, an independent aviation economist and business rescue practitioner, and a research associate at the of the University of Johannesburg, as a consultant to the business rescue process.

In a strongly worded letter, labour points out that Vermooten led an objection against the proposed bailout of SAA subsidiaries in May with a submission to the Standing Committee on Appropriations.

In a letter to business rescue practitioner Sono, labour questions why Vermooten was approached as a consultant after showing a clear anti-Mango bias.

“We cannot understand why such an individual would be engaged as a consultant and the company’s already scarce financial resources expended on his advice given his extremely disparaging opinions on Mango Airlines.”

Vermooten, a former consultant to Comair, has been highly vocal about state-owned aviation assets for well over a decade.

ALSO READ: Mango can be saved as SAA business rescue practitioner to file for exit today

Vermooten’s relationship with state owned aviation assets go back to the time of Mango’s launch in 2006, when he was freshly appointed as Deputy Director General for Public Enterprises, the airline’s shareholder, on an initial 12-month contract basis.

The department was unable to align his remuneration demands with existing salary bands at the time.

When Vermooten’s contact expired a year later, it was extended annually until 2011 and not renewed after that. At the time, he dragged Public Enterprises to the bargaining council for unfair dismissal.

An arbitrator found in his favour, but on appeal the Labour Court reversed the decision given the contractual relationship between Vermooten, and the department did not constitute an employee-employer engagement.

He was in fact a supplier.