South African Express, South Africa’s regional airline, has suspended all operations with no end date in sight. While the coronavirus outbreak was believed to be a part of the decision to stop operating, the airline was previously eyeing grounding due to its poor financial position.
SA Express suspends all flights
Announced late last night, regional airline South African Express will no longer be operating any flights until further notice. The suspension comes into immediate effect, with no suggested end date, and it is possible the airline may never fly again.
In a statement on its website, the airline said,
“In light of adverse recent developments, including the impact of the Covid-19 pandemic, SA Express announces that it will suspend operations from March 18 2020, until further notice.”
It further says that passengers booked to fly will be accommodated on alternative services, although it doesn’t elaborate on how this will work in practice.
As well as grounding its fleet of 19 aircraft, of which only 10 were currently in service, the airline has placed all non-critical SA Express staff on compulsory leave. The statement goes on to explain that,
“The airline will utilize this period to review its current network and streamline operations for improved efficiency.”
It concluded by saying that it will provide communication on any additional developments in due course.
A poor financial position
It’s a worrying trend that we’re seeing in the current COVIS-19 climate, that the airlines with the worst financial health prior to the outbreak are those who will be hit the hardest by the situation. Weeks ago, Europe waved goodbye to its biggest regional airline, an airline that had a raft of issues prior to the coronavirus outbreak.
The trend continues, with long-term worry Norwegian being highlighted just yesterday as the European airline with the least cash reserves to fall back on. Now, we’re seeing similar results in South Africa. While the COVID-19 pandemic may well be the straw that broke the camel’s back, SA Express’ problems ran far deeper than this.
Times Live notes that the airline has accumulated losses estimated to be around 1.2bn rand ($71m) over the past decade. Just last summer, the airline was even banned from its own home airports over unpaid debts.
In September last year, the airline received a government bailout of 300m rand ($17m) in a bid to get it back on its feet. However, in February this year, SA Express went into business rescue at the order of the high court, joining its big brother SAA in entering these measures.
Since then, there have been questions raised over the future of the airline. Finance minister Tito Mboweni questioned during the budget in February whether South Africa really wanted to continue owning the airline, declaring that it had a “limited role in the local aviation market.”
Indeed, the airline itself noted that the coronavirus was only a part of the decision to suspend operations, quietly nodding to its poor financial standing as the overarching reason for the grounding.
Now, with the coronavirus presenting an unprecedented pull back from all travel, the airline has found itself with nowhere left to hide. The question remains whether SA Express will be able to come back from the brink if and when this current health scare blows over.