In the wake of South African Aircraze (SAA) receiving yet another R3 billion bailout from you (the tax payer) to save the wounded national carrier, its bastard little sister – SA Express – also seems to be on the brink of collapse, losing at least US$400,000 (R5,36m) monthly in lease rates for grounded aircraft.
SA Express has been unable to satisfy the Auditor-General that it can continue operating as a going concern, while the Chairperson of the Standing Committee on Public Accounts (Scopa) says the airline is as good as gone.
Scopa Chairperson Themba Godi said in parliament: “South African Express is collapsing and we are trying to rescue it.”
TourismUpdate reports the regional airline’s inability to satisfy the Auditor-General that it can continue as a going concern was the reason given by Public Enterprises Minister, Lynne Brown, for the failure of the airline to table its annual financial statements for the 2016/17 financial year before the end-September deadline.
The Minister wrote to Speaker of the National Assembly, Baleka Mbete, explaining that the annual report and annual financial statements would be tabled as soon as the going concern status of the airline had been resolved and the audit had been concluded.
SA Express is losing an estimated US$400 000 (R5,36m) monthly in lease rates for grounded aircraft that are not in use, because there is no money to pay suppliers for parts to service the aircraft, and is having to pay to charter aircraft.
Scopa identified a number of challenges during the oversight visit, according to Themba. “The culture of non-compliance with the Public Finance Management Act and Treasury Regulations was a very big concern,” he says.
“As Scopa, we are going to work closely and babysit this entity until everything is corrected as we believe that, to remedy the current undesirable situation, we need collective efforts from everyone involved in order for South Africans to be able to see SA Express as a national asset as opposed to its being a national liability,” Godi told Tourism Update.
Earlier this year parliament also learnt that SA Express’ former CEO Inati Ntshanga (see picture) was paid more than R700,000 when he left abruptly at the end of March. Chairman George Mothema told Scopa that Ntshanga was paid out the balance of his contract.
Business Day – at the time – quoted Mothema as saying: “The CEO left because we decided not to renew his contract and to end it early. He was paid the remainder of his contract which is five months. We moved as a board and consulted our shareholder on the matter.”
Millions was wasted under Ntshanga’s watch (If you look at his photographs you might think he ate the entire budget – Ed.) As one example – South African Express sold two aircraft to a Lesotho-based company and leased the same aircraft at a cost of millions.