Home » Aviation: Low cost Era Over? As South Africa set to merge SAA, SA Express and Mango

Aviation: Low cost Era Over? As South Africa set to merge SAA, SA Express and Mango

by Atqnews
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SAA Ramasia south airways SAAT

Public Enterprises Minister Pravin Gordhan has announced that South African Airways (SAA), SA Express and Mango are to be merged.

Speaking at a media briefing on Thursday (24 May), he said that all three airlines currently fly to the same destinations.

“Bringing the airlines together and rationalising their routes and important. Rationalising the kind of aircraft needed at a particular time and day – that’s the experience we’re beginning to learn from airlines around the world,” he said.

“It’s that synergy and savings. Our net guess is that by putting the airlines together, we can go through a transition period where there are going to be difficulties.

“If you have something dysfunctional and (you) try to sell it, you will get little for it. The real challenge is putting the right people in the right places both on boards and management teams, and having the right oversight,” he said.

Gordhan also announced the appointment of a new SA Express board, chaired by Mmakeaya Magoro Tryphosa Ramano, which holds a mix of aviation experience, audit and accountancy backgrounds, among others.

Debt
According to National Treasury director-general Dondo Mogajane, South African Airways requires a R5 billion cash injection in the current financial year to help it meet its financial obligations.

However, he warned that the cash injection could not come from government as it has already pumped R20 billion into the state-owned enterprise.

Instead, other avenues are being considered to help cover the shortfall, with Mogajane saying that the National Treasury was willing to consider selling a stake in the airliner to a private equity partner.

Source:businesstech.co.za

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