Hundreds of customers stranded at airports across the country as it came without warning
STATE-OWNED low-cost carrier Mango Airlines on Tuesday temporarily suspended all flights because of outstanding payments of more than R57 million to another state-owned company, Air Traffic and Navigation Services (ATNS).
ATNS provides air traffic, navigation, training and associated services within a large part of the Southern Indian and Atlantic Ocean, comprising at least 10 percent of the world’s airspace.
Mango’s grounding of its flights left hundreds of customers stranded at airports across the country, because it happened without warning.
Mango said it would offer customers vouchers to help with alternative travel arrangements on other airlines.
In a statement, Mango’s acting chief executive, William Ndlovu, apologised for the inconvenience.
“We plan to resume normal operations as soon as possible,” Ndlovu said.
“We ask for calm and patience as we navigate through these challenges. We will update the public as soon as possible.”
Mango’s senior management and government representatives were locked in emergency discussions on Tuesday to find an amicable solution to the impasse.
In April, Mango was briefly grounded in a dispute with Airports Company South Africa over unpaid airport fees.
Mango’s near-implosion comes as labour unions on Monday filed an urgent application in the South Gauteng High Court to place the airline in business rescue and save it from liquidation.
Workers have not been paid salaries for at least two months, in spite of the government’s promises to recapitalise the airline once the Appropriations Bill for R819m was passed.
Mango has not made a profit for years, but is believed to have liabilities that exceed R2.5 billion.
Mango spokesperson Benediction Zubane said the airline had been flying on a “touch-and-go” basis because of a depressed market, exacerbated by the Covid-19 pandemic.
“As a result, that hampered our revenue-generating capability. We are finding it tough to generate revenue that is sufficient to cover our costs,” Zubane said.
“Our financial situation is quite dire, to the extent that there is a pending appropriations amount that is supposed to come and ensure that Mango is properly capitalised.”
Zubane said the process within the government to release the appropriated funds to recapitalise Mango had proved to be laborious, but discussions were ongoing.
“We expected that money as early as yesterday already for us to be recapitalised and remain financially sustainable. We are in a dire financial situation. Part of the money will go to ensure that we clear our debts, what we owe our creditors, and to ensure we remain a commercially viable airline.”
Independent aviation economist Joachim Vermooten said even if Mango were to receive the R819m allocation, it would still require a lot more money to pay its debts.
“If you spread it over the part debt, the R819m is only 32 or 33 percent of the total debt. That implies they still need R1.6bn to repay all the debt. So clearly Mango needs more money,” he said. “I think if they don’t pay ATNS, then they won’t be able to fly.”