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- SAA Technical wants to suspend its services to SAA and Mango due to unpaid debts, which means that the airlines will not be able to fly.
- But the spokesperson for SAA’s business rescue professionals says they have been assured that the repatriation flights can continue.
- The ultimatum comes just a couple of days before SA opens its borders to international travelers.
- For more articles, go to www.BusinessInsider.co.za.
Aircraft maintenance company SAA Technical has issued an ultimatum to SAA and Mango that it will not provide them with further services unless their unpaid debts are settled. This means that SAA and Mango will not be able to fly without the necessary SAAT inspections prior to take-off.
But Louise Brugman, a spokesperson for airline business rescue professionals Les Matuson and Siviwe Dongwana, says SAAT has assured them there will be no “immediate suspension” of service.
The ultimatum should not affect SAA’s repatriation flights for the next few days, he added.
Mango also said that the flights should continue throughout the long weekend, but that it participates in “key and sensitive discussions” with Mango and SAAT “to continue operations in these difficult times.”
Although Mango and SAAT are subsidiaries of SAA, only SAA is up to date in business rescue.
After the government missed the deadline for business rescue professionals to provide SAA with the R10.5 billion needed to prevent the airline’s liquidation, the public companies department is currently negotiating with banks and creditors to provide the money, in what could be bridge financing.
It is understood that the Treasury (reluctantly) agreed to find money to bail out the airline, but this will only be available in the next few months after the budget reallocations. The R10.5 billion will be used, in part, to settle the voluntary severance package for more than 3,000 of SAA’s 5,000 employees. Presumably the money can also be used to settle unpaid SAAT bills.
Over the past decade, SAA received around R30 billion in government bailouts, and the last time it made a profit was in 2011.
EXPLANATOR: How SAA landed in such a mess
The SAAT ultimatum comes just days before South Africa opens its borders for international leisure travel on October 1.
READ | Even with open borders, SA remains on the red list of many countries and tourists may not come
On Friday, Emirates announced that it will resume flights between Dubai and Joburg, Cape Town and Durban from that date.
SAAT has experienced its own controversy over the past year. Last year, local airlines were forced to ground some of their planes to verify compliance after irregularities were discovered during an inspection at SAAT.
This came after reports that SAAT used “fake parts” in servicing the planes, and that a crime syndicate had infiltrated the airline’s technical team. SAAT denied this, but Finance Minister Tito Mboweni later confirmed the widespread theft at SAAT, including the theft of “a complete engine.”
FlySafair, which owns its own maintenance division, has taken advantage of SAAT’s problems and continued to fly while other planes were on the ground.
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