• A special kind of coup

    Scared or compromised ANC leaders seem ready for collective suicide, says Solly Moeng.

  • Excuses, excuses...

    ‘White monopoly capital' is just a ploy to avoid SA’s real problems, say two analysts.

  • SA Inc's performance

    If SA were a company with its own share price, how would it perform, asks Jac Laubscher.

All data is delayed
See More

1time blame game: Not us, says Acsa

Nov 08 2012 22:34
Johannesburg - It was totally incorrect to claim that the Airports Company of South Africa (Acsa) was responsible for 1time's demise, Acsa said on Thursday.

"We were very supportive throughout," said Acsa spokesperson Solomon Makgale.

1time was put under provisional liquidation by the North Gauteng High Court on Wednesday after a failed attempt to rescue the business.

Business rescue allows companies in financial distress to be rehabilitated under supervision and subject to a court order.

A business rescue plan had been submitted for the airline, and then withdrawn.

Acsa had been advised that a new plan would be available this month, but the liquidation had been filed before the new plan was issued.

1time's decision to cancel all flights with immediate effect last Friday had come as a surprise, Makgale said.

1time was a client "and as such Acsa's wish for the airline was for it to find a way out of its financial difficulties", he said.

But Acsa had had no option but to balance its interest with those of the broader aviation industry.

An agreement had been reached to put 1time on cash terms.

"This was a way of ensuring that the overall debt did not escalate further," Makgale said.

"The decision by 1time to file for liquidation was solely theirs."

Earlier, 1time's business rescue practitioner castigated Acsa's "overall negative attitude".

"Acsa was only interested in recovering all its debts without considering the ripple effect this might have on the airline's operations," said Gerhard Holtzhauzen.

Acsa was the airline's largest creditor, claiming R147m.

The company forced 1time to pay for current services in cash the day after service was rendered, and in advance over weekends and public holidays.

"The aforementioned payment terms constrained 1time's cash flow," Holtzhauzen said.

"To make matters worse the reconciliation done by Acsa set off payments received to historic debts, despite the historic claims being ring-fenced."

As a result, shareholders were reluctant to take up a rights issue in 1time Holdings, which would have boosted the struggling airline by about R80m.

A major international airline company had expressed interest in acquiring the airline. But the timing and transfer of the business, as well as its short term cash requirements, had caused it to back out.

In addition, 1time's old aircraft were not nearly as fuel efficient as more recent models.

With fuel costs constantly rising, this put additional strain on the business's profitability.

"In the early stages of the business rescue process, ticket sales were on an acceptable level to sustain the airline's daily operations," he said.

Later, ticket sales decreased, contributing to the loss of profitability and higher cost to keep the aircraft in the air.

Last Friday, 1time had an operating cash shortfall, which would have increased the following week.

"The impact decision to ground all aircraft and suspend the service with immediate effect was taken to ensure that 1time's safety would not be compromised," Holtzhauzen said.

As a result, minimal warning was given, and operations were shut at 15:00.

Provisional liquidators Hannes Muller and Aviwe Ndyamara, from Tshwane Trustees, would now take over from Holtzhauzen.

Provisional liquidators can recommend to the court the liquidation order be lifted and the company resuscitated, or that the airline be placed in final liquidation.
1time  |  air travel  |  airlines



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think women are under-represented in leadership positions globally?

Previous results · Suggest a vote