Mango denies SAA provided cheap plane leases | Fin24
 
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Mango denies SAA provided cheap plane leases

Jun 15 2016 17:03
Liezel Hill

Johannesburg - Mango Airlines leased planes from South African Airways SOC at market-related rates, its chief executive officer said, denying a statement by the budget carrier’s state-owned parent that it provided aircraft at a “substantially discounted cost.”

“It’s outright, straightforward, not true,” Nico Bezuidenhout, 39, said in an interview. Mango pays market-related lease rates and since 2010 has negotiated new deals directly with leasing companies, he said.

SAA said on June 11 it sub-leased Mango all 10 of its Boeing 737-800 aircraft at a discounted cost while paying the leasing company the market rate, an arrangement that would potentially have given the budget carrier an advantage in SA's highly competitive market. The move was a “necessary investment” to support the low-cost entity, SAA said.

The statement was part of a response to the resignation of Bezuidenhout, who will become the head of Africa-focused carrier FastJet from August 1.

“SAA must please substantiate any of these claims,” Bezuidenhout said.

SAA has been surviving on government debt guarantees and last posted a full-year profit in 2011.

Mango, which connects cities such as Johannesburg, Cape Town and Durban, was profitable in the year to March 2015 and made a loss in the most recent fiscal year, Bezuidenhout said.

The Democratic Alliance, the largest opposition party, will request that the Competition Commission start a probe into possible collusion between SAA and Mango, the DA said on Monday.

mango  |  da  |  saa  |  johannesburg  |  aviation
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