Less than three weeks after taking to the skies again, South African Airways (SAA) is already facing a backlash from staff, cancelled flights, and support problems.
Only days after relaunching flights on 23 September 2021, SAA made significant changes to its new international schedule.
Some flights to Kinshasa and Lusaka were cancelled, and the airline delayed the launch of daily flights to Maputo.
Testing by MyBroadband further revealed that the airline’s support services — specifically its refund department — are not operating.
Calling the SAA’s refunds helpline triggers an automated message, after which the call is disconnected.
A reservations agent told MyBroadband that the SAA Refunds Department had been closed down, and they could not assist with any refunds.
MyBroadband contacted SAA’s communications department for clarity about this issue, but the request for comment went unanswered.
In the latest blow to the airline, SAA workers represented by the South African Cabin Crew Association (SACCA) and Numsa will picket outside the Airways Park office in Kempton Park on Tuesday.
These workers are unhappy about unfair working conditions, including a 35% pay cut and the airline’s bloated management structure.
SACCA President Zazi Sibanyoni-Mugambi said that while their members had to take a 35% pay cut, SAA management has increased their salaries.
She added that employees who have taken voluntary severance packages are being employed again when current SAA employees can fill those positions.
“The biggest concern to us is that we have an SAA CEO who refuses to see the unions,” Sibanyoni-Mugambi said.
To make matters worse, there is no deal yet between the SAA’s new equity partner, Takatso Consortium, and the Department of Public Enterprises (DPE).
The Takatso Consortium is set to take a 51% shareholding in South African Airways and pump billions into the struggling airline.
This deal has not happened yet, which means Takatso is not currently involved in any SAA operations.
Speaking to Moneyweb on 29 September, Takatso CEO Gidon Novick said he naively thought the deal could be done a lot quicker.
Novick dismissed speculation that Takatso’s shareholders — Harith and Global Aviation — withdrew from the process.
“Both are involved. Harith is the key strategic funding partner, and Global and the team at Lift are involved as technical partners. So, it’s very much in play, very much intact,” Novick said.
Novick could, however, not commit to a timeline on when they will make a deal with the DPE.
It means SAA is currently operating without its promised equity partner, it has staff and union challenges, and its customers are faced with uncertainty about flights and support services.
This is familiar territory for South Africans who are tired of funding a failed airline gutted by mismanagement and corruption, and which burned through billions in bailouts.
South Africa Airways (SAA) announced on Twitter that they would be back in action from 23 September 2021.
“The wait is finally over. In just under a month, the striking and familiar livery of SAA will once again be visible in the skies as the airline resumes operations. The carrier has confirmed the first flights will commence on Thursday, 23 of September 2021,” it said in a Twitter statement on Wednesday.
“After months of diligent work, we are delighted that SAA is resuming service, and we look forward to welcoming onboard our loyal passengers and flying the South African flag. We continue to be a safe carrier and adhering to COVID-19 protocols” said Interim CEO Thomas Kgokolo.
The airline said they would start operating flights from Johannesburg to Cape Town, Accra, Kinshasa, Harare, Lusaka and Maputo.
“Voyager bookings and Travel Credit Voucher redemption will be available from Monday, 6 September 2021,” the airline said, adding that it would would add more routes with time depending on the market.
“There is a profound feeling of enthusiasm within Team SAA as we prepare for takeoff, with one common purpose – to rebuild and sustain a profitable airline that once again takes a leadership role among local, continental, and international airlines,” said Kgokolo.
“The aviation sector is currently going through a testing period, and we are aware of the tough challenges that lie ahead in the coming weeks. We thank South Africa for the support we have received in getting us to where we are today. As we are now poised for takeoff, we see this as a major milestone for SAA and the country,” he continued.
South Africa’s national airline had its wings clipped and was grounded last year in March. It hasn’t flown as it was under business rescue.
In April, Kgokolo told MPs that should things go according to plan, without any disruptions from pilots and the COVID-19 pandemic, the airline would be back in the sky soon.
SAA interim chief executive Thomas Kgokolo said Mango Airlines, the low-cost arm of state-owned South African Airways (SAA), will be placed into business rescue.
Mango Airlines, trading as Mango, is based at OR Tambo International Airport and is a whole-owned subsidiary of SAA.
Mango was launched in October 2006, and the first commercial flight took place on 15 November 2006.
The airline has a fleet of new generation Boeing 737-800 aircraft, which boast a seating capacity of 186.
Mango Airlines faced financial challenges and was grounded due to non-payments and debt to Airports Company of South Africa (Acsa). No Mango planes were allowed to depart or land at any Acsa airport.
Kgokolo has now revealed that the Mango board and the government will place the company in business rescue. Consultation with labour groups was underway.
Speaking to ENCA, Kgokolo said some Mango staff were still awaiting delayed salaries. This problem should be addressed in the coming weeks as part of a R2.7 billion bailout given to SAA subsidiaries.
SAA exited business rescue in April after a lengthy process that reduced its workforce by almost 80%.
The national carrier has been unprofitable for almost a decade, surviving on state bailouts and government debt guarantees. It was placed under administration a year ago.
The airline exited administration after receiving R7.8 billion from the government.
SAA has not yet committed a firm date to recommence operations, promising an announcement in the coming weeks.
Last month, the government announced it would sell a majority stake to a consortium in the country’s grounded national carrier.
The consortium comprised Johannesburg-based Global Airways and private-equity firm Harith General Partners.
They will take a 51% shareholding in South African Airways, and the government will retain a minority stake.
The grouping named Takatso will invest around R3.5 billion rand over the next three years in SAA, Harith CEO Tshepo Mahloele said.
“Government will have no further financial obligations to the company, outside of the existing liabilities that they will settle,” Global Airways’ Gidon Novick said.
“Route networks we are still working on, and it will be a phased rollout based on demand re-emerging post-Covid.”
By Siyabonga Mkhwanazi for IOL
The government has announced the sale of a majority stake at cash-strapped SAA with a black-owned consortium pumping in more than R3-billion to get the majority slice of the stake.
Public Enterprises Minister Pravin Gordhan said on Friday said after the conclusion of all business rescue process the purchase agreement will be signed with Takatso consortium consortium.
The consortium, which paid more than R3bn for the stake, will own 51% of SAA while the government will have a 49% stake in the airline.
Gordhan said this was a start for the airline with the new equity partner.
He said boards will be representative on the basis of 51% and 49%.
“How much is the equity partner putting in, as I have said more than R3bn. All the other subsidiaries are being evaluated,” said Gordhan.
SAA has been in trouble for many years and has not been able to make a profit over the last 10 years.
The government has been pumping in bailouts to the value of billions of rands in the last few years.
Gordhan said after the equity partner has come on board SAA will no longer rely on bailouts for its survival.
Parties have been calling for an end to bailouts of state-owned entities and government had also been getting them to strengthen their balance sheets.
By Sifiso Zulu for EWN
State-owned airline Mango is still waiting to hear from the Department of Public Enterprises about exactly when it will receive a cash injection amid concerns that salaries may not be paid.
The airline said it would be able to communicate on Tuesday about what lay ahead while there were reports that it would soon go into business rescue.
About 700 employees at Mango stand to be affected by whichever decision is reached.
Government has delayed much-needed funding for Mango, promising on a number of occasions that money would be paid over.
Aviation experts say the horse had already bolted at Mango and it would take immediate cashflow to make up for the financial losses.
Aviation economist Joachim Vermooten said Mango was already faced with financial problems, which were made worse by the COVID-19 pandemic.
“You can’t maintain these kinds of operations. You really need to restructure and take it down to whatever you can learn.”
“Mango still has an important role in the aviation industry, particularly to provide SAA with what we call domestic connectivity,” said aviation expert Guy Leech.
Meanwhile, trade union Numsa said the department was to blame for the financial challenges at Mango.
By Emily Derrick for Simple Flying
A South African Airways flight is under investigation after a miscalculation almost caused a serious incident during take-off. The flight, which took place on February 24th, was heading to Brussels to pick up some COVID-19 vaccinations but almost crashed as it departed. According to reports, automatic safety features were responsible for preventing a catastrophe.
The South African Civil Aviation Authority (SACAA) officially launched an investigation into the events on February 24th. The pilot and co-pilot of the flight reported the incident as per standard procedures. However, the SACAA said it should have been reported within 72 hours, but in fact, the aviation authority only heard about the incident on March 17th.
The incident in question was very nearly a serious disaster. A South African Airways (SAA) Airbus A340-600 was set to head from South Africa to Brussels to collect COVID-19 vaccines. However, it appears the crew seriously miscalculated the plane’s take-off weight by almost 90 tons. The resulting error meant the plane was not traveling fast enough to take off safely.
Early reports suggest the Airbus’s safety features kicked in to override this; however, the aircraft is not designed to correct speed for flap retraction. As such, when the crew retracted the flaps, the plane went into what’s known as an alpha floor event. The plane was at risk of stalling during take-off. Luckily for the crew, the Airbus’s safety systems again took over, adding more power and lowering the nose of the plane, thereby preventing it from stalling.
Why is it such a serious incident?
The incident is being called “extraordinarily dangerous” by the SACAA. Although no passengers were onboard and the safety procedures meant no one was harmed or close to being harmed, the SACAA seems more concerned with the serious miscalculation.
According to reports, the pilot did not have the correct number of recent flight hours to be operating the flight, which caused a delay before the incident occurred. SAA planes have mostly been grounded due to the pandemic and ongoing financial issues, which have meant few pilots have been flying regularly.
SAA bailout package
South African Airways has suspended most operations for so long that pilots now no longer have enough flight training. Photo: Airbus
Many have criticised the SACAA for allowing the flight to take off at all and have accused the governing body of giving SAA special treatment. The flight was allowed to take off after exemptions were granted. It was a one-off to get vaccines, and so was allowed to go ahead. The SACAA denies favouritism and says it takes each case individually and is investigating the incident now it has been made aware of what happened.
The new allegations of special treatment for SAA come within weeks of fresh allegations from members of the South African parliament. Some MPs claim the government is providing too much funding to save the airline when it should be allowed to collapse. How much finance should be awarded to the airline is contentious, but providing exemptions from safety regulations raises more serious questions about SAA’s legitimacy.
South African Airways administrators said they will decide within the next week whether to sell or liquidate the insolvent carrier if 10.5 billion rand ($620 million) pledged by the government fails to be delivered.
The business-rescue practitioners have placed SAA under care and maintenance in the meantime, suspending all operations, while they wait for the state to come up with the required package, according to a letter to creditors sent on Tuesday.
“Certain funders have indicated a willingness to provide a portion of the funding” subject to certain conditions, the administrators said, without giving further detail. How to proceed if a cash injection doesn’t come to fruition may include a sale of the carrier or its assets, with liquidation another option, they said.
The fate of SAA has become an emotive topic in South Africa as the country struggles to recover from Covid-19 and an economy that was in recession even before the virus hit. Public Enterprises Minister Pravin Gordhan has made the resuscitation of the airline a major priority, but Finance Minister Tito Mboweni has made clear he does not support further bailouts with limited state funds needed elsewhere.
The National Treasury said in July it would help “mobilize” funding, and Gordhan’s Department of Public Enterprises has repeatedly claimed to have received numerous approaches from interested private backers. Yet no formal offer has been placed more than two months later, and it’s not clear whether backing will be secured, despite some interest from Ethiopian Airlines Group.
The Treasury wants strict conditions attached to any guarantees it provides for loans to SAA, two people familiar with the matter said this week. President Cyril Ramaphosa has backed the airline’s rescue, they said.
SAA will fly the cargo and repatriation flights it has already committed to but won’t accept any more for now, a spokeswoman for the administrators said.
South Africa is due to open its international border for commercial flights from 1 October, more than six months after closing them to contain the coronavirus.
By Bonga Dlulane for EWN
The South African Airways (SAA) business rescue plan (BRP) has been approved by 86% of the vote at Tuesday’s creditors’ meeting.
This paves the way for the Department of Public Enterprises (DPE) to launch a new airline with an interim board and CEO.
The department will announce a new board soon and the interim CEO of the airline is Phillip Saunders.
The approval of the plan comes after months of public spats between the department, unions and business rescue practitioners.
It’s a major win for the department as it has fought for SAA to be restructured and not liquidated.
The new airline will need approximately R16 billion to get off the ground and pay creditors.
Money will also be needed for the 1,000 staff who will be hired to be part of the airline.
With the approval of the plan, voluntary severance packages will be paid to over 2,700 employees who will now be retrenched.
By Babalo Ndenze for EWN
Some members of Parliament said that the only option left for South African Airways (SAA) was liquidation.
This comes after a vote on a restructuring plan was delayed until July after creditors and unions adjourned talks.
It also follows a decision by the Department of Public Enterprises to withdraw from the Leadership Consultative Forum working on a business model for a new and restructured SAA.
The Department of Public Enterprises said that instead of creating conditions for attracting investment and skilled South Africans, three unions had put SAA on a path towards possible liquidation.
The department said that unions had effectively aligned themselves with a competitor who stood to benefit substantially should SAA be liquidated.
However the Democratic Alliance (DA)’s Alf Lees, a member of the Standing Committee on Public Accounts (Scopa), said that liquidation was increasingly looking like the only option.
“Now it seems to me that we’ve hit the wall and liquidation is the only option,” Lees said.
He said that the business rescue process should ideally have ended in December and the rescue team should have applied to court for liquidation back then.
“They should have then done what the law required of them to do and applied to court for liquidation, so that step now remains.”
By Sumit Rehal for Simple Flying
FlySafair has expressed an interest in purchasing fellow South African carrier Mango Airlines, if it is put up for sale. The airline’s Chief Executive Officer Elmar Conradie confirmed the potential move on Tuesday.
IOL reports that FlySafair’s management approached South African Airways’ administrators about a possible acquisition of the low-cost carrier. However, Conradie made it clear that he is only interested in Mango and not any other aspects of its struggling parent company.
Mango was founded in 2006 and operates mostly domestic routes within South Africa. However, it does serve Zanzibar, the is a semi-autonomous region of Tanzania.
Conradie affirmed that a purchase of SAA Technical, which specializes in aircraft maintenance would not make sense. This is because his carrier is already serviced by Safair Operations (Pty) Ltd, its own parent company.
South African Airways has been going through a dire period as of late with struggling financials. Last month, South Africa’s National Treasury shared that it will provide a $1 billion bailout for the country’s flag carrier. However, this decision has been met with criticism by many members of the nation’s public due to the amount of funds being spent on the airline.
Meanwhile, FlySafair has been seeing great progress since it commenced operations six years ago. It currently flies to seven destinations across South Africa and it continues to increase its routes and frequencies.
Moreover, it is set to announce a new service to Durban from Johannesburg next week. Meanwhile, it has been slowly upgrading its fleet of 17 aging Boeing 737-400 aircraft to updated 737-800 models.
While the novel coronavirus outbreak is having a massive shift in the global aviation industry, Conradie claims that it has not had an impact on his firm’s operations as of yet. In fact, FlySafair is expecting capacity to increase by 15 percent this year and is yet to see any negative results on bookings amid the spread of the virus.
Several other airlines have been forced to cut many of their flights by the day due to the drop in demand. Additionally, some carriers have had to suspend services due to governmental policy, such as Kuwait’s recent decision to close its intentional airport.
South Africa currently has 16 active cases. However, with the World Health Organization now classing the outbreak as a pandemic, airlines across South Africa could start to feel the brunt of it. Ultimately, South African Airways will be keeping a close eye due to its existing struggles.