Mango could join SAA, SA Express airlines merger

The government is exploring the possibility of a merger between SA Airways, SA Express and Mango airlines, with a decision to be made shortly, Deputy Minister of Public Enterprises Bulelani Magwanishe has told parliament.

14 Apr 2016

NJR ZA via Wikimedia Commons

Addressing the select committee on public accounts where SA Express was appearing as a result of its poor performance, Magwanishe revealed some details about plans for the state-owned airlines, saying an undesirable "form of competition" had developed among them.

Finance Minister Pravin Gordhan and Public Enterprises Minister Lynne Brown have suggested a merger between SAA and SA Express, both of which have struggled to stay afloat without government bailouts and guarantees in recent years. Magwanishe's statement indicated Mango could be part of the merger too.

He said Gordhan, Brown and Deputy President Cyril Ramaphosa were looking into the issue and a decision would be made "soon".

There was no indication as to how the merger would affect consumers. He said a merger would allow for the three airlines to streamline finances and technical expertise.

SA Express has in recent years managed to turn a small profit, mostly thanks to extreme cost-cutting measures. However, chairman of the board, George Mothema, yesterday admitted were it not for government guarantees, which allowed it to borrow privately, the airline would not be able to function as a going concern.

Scopa also expressed concern about the quality of the airline's financial statements that contained material misstatements, and its failure to meet its targets.

Source: The Times

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