Public Enterprises Deputy Minister Phumulo Masualle says there is still a commercial case for SA Express, and that it can play a critical role as a feeder airline to service secondary routes and key cities in the Southern African region.
Masualle said this after engaging the business rescue practitioners of SA Express, which was placed under business rescue on 6 February 2020 by an order of the Johannesburg High Court.
The business rescue process was as a result of legal action undertaken by service provider Ziegler. The service provider, whom SA Express had contended in its responding papers to the legal action, had been engaged irregularly by the previous management of the airline.
Masualle expressed his concerns about the prospects of job losses at SA Express, as stated by the South African Transport and Allied Workers Union (SATAWU).
The Department of Public Enterprises had tasked the SA Express board to seek a Strategic Equity Partner (SEP) to provide working capital in December 2019, due to continued funding requirements at the airline.
This was despite a government injection of R1.5 billion into the airline in the last two years.
The business rescue process interrupted the board process to seek a lifeline.
“The key issue in the business rescue process that needs to be resolved is the provision of the Post Commencement Finance (PCF) for the airline to enable continued operations. The department is hopeful that the business rescue practitioners will be able to raise the PCF,” said the department.
SA Express, which falls within the ambit of the DPE, offers connectivity between primary and secondary domestic destinations in South Africa and five other Southern African Development Community countries.