SA Express licence in jeopardy

The clock is ticking for SA Express to resume operations following 10 months of its fleet being grounded.

Should the airline not return to the skies within the next two months, it could have its Air Service Licence (ASL) revoked by the Air Services Licensing Council.

Once an ASL is issued the Air Services Licensing Act requires that an airline’s air service must not be interrupted for a period exceeding 12 months. If it is, the licence must be returned to the council.

The airline’s aviation training organisation and aircraft maintenance organisation approvals, as well as its its air operator certificate expired earlier this year.

These approvals, which are issued by the South African Civil Aviation Authority (Sacaa), are required by law to operate commercial air transport operations in the country.

Sacaa spokesperson Kabelo Ledwaba says SA Express has submitted an application for renewal of its air operator certificate, but the process remains on hold as a result of the airline’s unfolding business rescue process.

In a letter sent to the Department of Transport, International Air Service Licensing Council, and the domestic Air Services Licensing Council last month, aviation company Fly Modern Ark says the SA Express licences should be cancelled “with immediate effect” because the airline has not been operational for most of the year.

“SA Express is financially not in a position to operate anytime soon.It is no longer an airline and can therefore not hold licences,”the letter reads.

Fly Modern Ark adds that the routes which had previously been operated by SA Express should be given to other domestic airlines that are operational.

SA Express went into business rescue in February but the rescue practitioners failed to secure the post-commencement financing required for the state-owned entity.

In April The high court placed the airline under provisional liquidation, but in September worker-owned entity Fly SAX won the bid to buy the airline.

The airline’s provisional liquidators are however yet to conclude the sale of the airline.

Fly Modern Ark was one of the 16 other bidders that lost the bid to buy SA Express. The aviation company offered the provisional liquidators in April R400 million to recapitalise the airline and to pay off its debt.

Fly SAX however won the bid and the entity has opted to raise an initial R250 million from crowdfunding to recapitalise the beleaguered airline.

Theunis Crous, CEO of Fly Modern Ark, has denied that the failure of his company to secure the bid is behind its calls to cancel the SA Express licence.

He told Moneyweb that it’s only “fair” to the rest of the country’s aviation industry that the SA Express licence be cancelled, adding that the airline’s new proposed owners should be treated as “any other new role player.”

Moneyweb understands that the Air Services Licensing Council is meeting later on this week, wherein the potential transfer of routes held by SA Express will be discussed.

Fly SAX spokesperson Thabisile Sikakane says the entity has written to provisional liquidator Aviwe Ndyamara “to ask him to intervene” in the matter. Ndyamara however has not responded to the entity’s request, according to Sikakane.

She adds that Fly SAX still remains uncertain of the funds raised from the sale of the airline’s assets in November, despite repeated requests for Ndyamara to provide the information.

Proceeds from the sale are expected to go towards the reduction of the purchase price of the airline and any shortfall will be recovered from the bank guarantee provided to the liquidators from Fly SAX

Sikakane says the council has refused to discuss revoking the airline’s routes with Fly SAX, because the airline is still under the care of the provisional liquidator, leaving the entity uncertain of its bid to buy the airline.

This article first appeared on Moneyweb and was republished with permission.

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