The troubled state-owned low cost airline’s 750 employees are owed R157m in unpaid salaries and believe if it is placed under business rescue it could profitable by 2023.
Johannesburg – Troubled state-owned low cost airline Mango’s 750 employees are owed R157 million in unpaid salaries and believe if it is placed under business rescue it could profitable by 2023.
Mango, a subsidiary of the equally struggling national carrier SAA, on Tuesday suspended its flights and services due to the debt it owes to the Air Traffic and Navigation Services (ATNS).
It also has paid off hundreds of its staff since May this year.
According to the Organisation Undoing Tax Abuse (Outa), which wants President Cyril Ramaphosa to intervene in the airline’s crises, state-owned ATNS is owed almost R58m by Mango.
Outa said Mango’s parent company SAA also owes ATNS over R55.5m.
The Mango Pilots Association, the SA Cabin Crew Association (Sacca) and the National Union of Metalworkers of SA (Numsa) have asked the South Gauteng High Court to urgently place the low cost airline whose fleet shrank from 14 aircrafts to three in the past year under business rescue.
In their urgent application to have Mango placed under business rescue set down for next Tuesday, the two associations and Numsa told the high court that acting Mango chief executive William Ndlovu informed them earlier this year that due to outstanding funding from its shareholder SAA, its lessors were being intolerant of missed payment deadlines.
”On April 1, 2021 Mango’s fleet sank to three aircrafts from five. Priori to the Covid-19 pandemic Mango’s fleet consisted of 14 aircrafts (sic),” reads the founding affidavit filed by Sacca president Zazi Nsibanyoni-Mugambi.
The two associations and Numsa are unhappy that their members are owed R157m in unpaid salaries despite continuing to do their work and despite SAA allocating R819m of its share of the R2.7 billion bailout by the National Treasury on June 24.
Numsa and the associations insist that while the situation at Mango is “extremely urgent and dire” the airline can easily be rescued using existing assets and re-allocation of funds.
Nsibanyoni-Mugambi said based on Mango’s presentations, if the airline can be placed under business rescue it could be profitable by 2023 or 2024.
”The income statements suggest that Mango will incur a loss of R3.9m in 2022, will earn a profit of R97.5m in 2023 and R146.5m in 2024,” she said in her affidavit.
She said the successful rescue of Mango would save 750 jobs and the livelihoods of another 10 000.
Mango is also facing a liquidation application expected to be heard in the South Gauteng High Court, which has been filed by Irish company and one of its lessors Aergen Four Aircraft and Aergen Five Aircraft.
Aergen has agreed to postpone its liquidation hearing to August to allow Mango time to start the business rescue process.
SAA has not indicated that it will oppose the liquidation application against Mango, according to Nsibanyoni-Mugambi.
Meanwhile, Outa has warned that placing Mango under business rescue may be too little too late, as it should have been done early in the Covid-19 pandemic that grounded the industry.
The organisation said the R58m in outstanding fees due to ATNS is significant when considering the entity’s total revenue.
”Now is the time for the Presidency to intervene with urgency and for ministers, directors-general and state-owned entities executive management to acknowledge their part in this atrocious situation, and to adopt a neutral regulatory and fair-competition approach towards air transportation in South Africa,” Outa said.