New blow for Mango, Comair

A potential blow to the resurrection of Mango and Comair was dealt by the Air Service Licensing Council after it suspended their licences this week.

Mango had been in formaldehyde since going into business rescue last year with a mountain of debt, about R2.5 billion in unpaid bills and R174 million in unflown tickets owed to passengers.

Comair’s Kulula brand raked in last-minute cash with a sale hours before it clipped its own wings. It could not secure half a billion rands to stay afloat.

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Now, its R3.5 billion in assets were up for sale as a bundle to an investor with deep pockets, deep enough to come up with at least R500 million to get into the club of bidders for Comair’s skeleton. SA Express finally had its licence revoked, too, this year, but only as a last resort after going into business rescue in February 2020.

It then headed into provisional liquidation two months later and since then several failed attempts to flog off whatever was left of the company finally forced the Air Service Licensing Council’s hand.

It cancelled all its route rights and licences. South African Airways was in business rescue without operating a single commercial flight longer than any of the other defunct and semi-defunct airlines. The state-owned carrier entered protection in December 2019 and, almost two years later, emerged with its licences and route rights intact.

The licensing council was finally reconstituted in March this year, after a year of inactivity, as the minister of transport neglected to appoint new members on both the domestic and international collectives.

During that period, airlines were unable to apply for new network points and nurture any kind of growth. The period when the council was not operational also happened to include SAA’s emergence from business rescue.

Had the council been active, it would have been legally compelled to treat SAA the same as it just had with Comair and Mango and revoked the flag carrier’s traffic rights. But aviation analyst Guy Leitch smelled a rat.

He said while it was positive to see the Air Service Licensing Council doing their job without fear of favour, he questioned the timing of it.

“It is curious that Mango’s licences were suspended for two years on the eve of the business rescue practitioner’s anticipated receipt of a buyer’s proof of funding.”

But Mango’s business rescue practitioner, Sipho Sono, assured The Citizen that he expected all licences and route rights to be reinstated once a transaction had been completed. He said it was not the end of Mango.

Leitch did wonder though whether the council was jerked into action at the behest of the Takatso Consortium to protect its familial carrier, Lift.

The draggedout acquisition of SAA was led by Lanseria airport owners Harith and its minority partner, Global Aviation, owners of Lift.

Takatso was named preferred partner to the department of public enterprises in a proposed majority acquisition of SAA equity in June last year. Mango was excluded from the deal. Not much had happened since.

“The slowness of the Air Service Licensing Council in stripping SA Express from its licences and the fact that it was conveniently absent during SAA’s non-operational time speaks of double standard,” said Leitch.

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