Trade union Solidarity reacted to Public Enterprises Minister Pravin Gordhan’s announcement that SAA with low cost carrier Mango and and its slutty little sister, the – also – highly mismanaged SA Express (see BusinessTech report below).
According to Connie Mulder, head of the Solidarity’s Research Institute, it is preposterous to consider merging these airlines, as this may lead to even greater losses. It would be akin to throwing a cement life jacket to a drowning person.
Solidarity says it believes that businessmen should conduct business, not bureaucrats. That is why Solidarity is firmly convinced that this supports its case for business rescue. A business practitioner responsible for turning SAA around should be appointed by the court. The government as a shareholder should no longer be in control of any airlines – airlines should be run by private companies.
Meanwhile BusinessTech.co.za quotes the Sunday Times who reports a virtually unknown music promoter was given a three-year tender to supply SA Express with fuel worth R2.4 billion – but failed to deliver a single drop. This is despite a deal already being in place to receive fuel from SAA.
The deal was said to be orchestrated by two SA Express executives without following any tender process or the knowledge of the airline’s board and management. SA Express confirmed that its current fuel supply deal with SAA came at an average cost of R45 million a month, thus the dodgy EML Energy deal meant the already troubled airline paid roughly R800 million more than SAA over the three years.
And if you do not already know this. SA Express is grounded, and rightly so. The South African Civil Aviation Authority (SACAA) announced last week that it had suspended SA Express’ Air Operator’s Certificate (AoC) as well as the airline’s Aircraft Maintenance Organisation (AMO) approvals. In addition, the SACAA has also suspended the Certificates of Airworthiness of nine of the 21 aircraft being operated by the airline.
“This effectively means that SA Express can no longer continue to operate as an airline,” the SACAA said in a statement.