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Airline on verge of collapse

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During a parliamentary briefing was unable to table its annual report for 2016/17 before Parliament last year

SOUTH African Express (Sax) airlines has come under criticism from the Portfolio Committee on Public Enterprises for its failure to address operational challenges, such as flight cancellations and timekeeping, as well as poor communication with passengers.

During a parliamentary briefing yesterday on its 2017/18 annual report, the committee also noted with concern that the airline, which offers flights to and from Kimberley, was unable to table its annual report for 2016/17 before Parliament last year.

“The committee was of the view that the company is experiencing serious financial challenges, as it is unable to meet its financial obligations and pay its bills on time. The committee also expressed concern about the airline’s failure to have its annual and financial reports signed off by the auditor-general,” a statement issued by the committee, following the briefing yesterday, stated.

Questioning the Sax delegation, the committee said its presentation painted a grim picture, showing that the airline is on the verge of collapse.

The committee chairperson, Lungi Mnganga-Gcabashe, was mandated to engage with the minister to discuss the possibility of a cash injection for the airline from National Treasury.

“I have had discussions with the minister about challenges at Sax,” said Mnganga-Gcabashe, adding that in the minister’s budget vote speech it was announced that the airline was likely to require a recapitalisation from government to strengthen its balance sheet, return it to solvency and improve its credit worthiness.

“The minister is looking for solutions. However, seeing that the committee has mandated that I meet with the minister to discuss the issue of capital injection and how National Treasury can assist with the airline, I will take up the matter.”

The committee also pointed out that former directors and executives should be held accountable for the airline’s financial challenges.