SA Express says it's on the right track despite suspensions | Fin24
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SA Express says it's on the right track despite suspensions

Sep 05 2019 19:10
Sibongile Khumalo

Struggling domestic and regional carrier SA Express is confident that it is making progress stabilising its business, following the recent grounding of its aircrafts over debt.

The airline has experienced operational hurdles in recent years, including the 2018 suspension of its fleet by the aviation authority over safety concerns. 

On Thursday, the management of SA Express appeared unfazed by the airline's brief suspension by Airports Company South Africa (ACSA) over non-payment of debt which is said to be around R71m.

Acting chair Kugan Thaver told media that the state-owned carrier was solvent, since it relaunched its operations 2018, and that the 24-hour disturbance last week had been resolved through partial payment of the debt.

New path

"While it is true that the airline has experienced a few challenging times over the past few years, is is also incontestable that we are now charting a new path," said Thaver.

The airline was in January granted a R1.2bn guarantee from the state, which has been earmarked for settlement of historic debt. A new business strategy, which involves rightsizing of the workforce, is being implemented in a bid to steer the company out of a financial crisis. 

Acting CEO Siza Mzimela said the airline had withdrawn from servicing routes between Johannesburg and Richards Bay, Johannesburg and George, and cut out the Durban hub to focus on its Johannesburg and Cape Town hubs.

Mzimela said one of the challenges identified was that the airline had in the past "spread itself too thinly" and it will now focus on markets where its services are most required. 

Like some other state-owned entities, SA Express has been impacted by allegations of irregularly expenditure and corruption.

Evidence presented before the Commission of Inquiry into State Capture has detailed numerous acts irregular financial conduct in the awarding of contracts by the airline, including the 2015 contract between the airline and the North West Department of Safety and Transport to operate the Mafikeng and Pilanesberg airport.

Thaver said an investigations into the North West contract were underway.

acsa  |  sa express  |  siza mzimela  |  aviation


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