We've reported extensively on South African Airways and its financial challenges in the last few months. But it's regional partner SA Express is also badly in need of a financial lifeline, as reports have surfaced to suggest it may not have the funds to pay employee salaries beyond February 2020.
In need of government assistance
According to South African media outlet Daily Maverick, SA Express has its own team of business rescue practitioners (BRPs) working to turn the carrier around. These BRPs have reportedly asked South Africa's Department of Public Enterprises for funds to pay salaries beyond February 2020 as it is bankrupt. Interestingly, this government department fully oversees the operations of SA Express as it is a state-owned airline.
South Africa's Minister of Finance, Tito Mboweni, had allocated R200 million (US$12.81 million) to the airline for 2020/21 in the budget. However, this money has yet to be transferred to the airline. This could affect as many as 1,000 employees of the airline. However, as the airline has yet to receive the funds, there also seems to be doubt regarding the government's willingness to actually keep the airline afloat. This rings especially true after recent remarks made by the Finance Minister:
"[The government will] need to assess its appetite for continued ownership" -Tito Mboweni, SA Minister of Finance
Daily Maverick reports that the airline has previously said it needs R164 million to remain operational for this upcoming fiscal year. This is the equivalent of US$10.5 million.
Losses increasing
- Transnet (R260 million)
- Rand Merchant Bank (R14.4 million)
- Flyfofa Airways (R18 million)
- Mothebe Shuttle Services (R1.5 million)
- African Charter Airlines (R14 million)
Do you think the government will be able to step in and fill the gap? Or will it decide to abandon the airline? Let us know what you think by leaving a comment.
We've contacted SA Express with a request for comment. At the time of publishing, we have not received any response. However, we will update this article if any new information is received.