SA Express, South African Airways Merger Underway

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The process to merge South African Express (SA Express) with South African Airways (SAA) is underway, South African Public Enterprises Minister Pravin Gordhan said on Wednesday, during his presentation to Parliament’s Portfolio Committee on Public Enterprises, the Minister said the first step had already been taken.“The first step of consolidating SA Express with SAA has just been concluded, which was to place both airlines within one Shareholder Ministry. SAA has been transferred back to the department,” he said.

South African President, Cyril Ramaphosa earlier this month transferred the administration of the South African Airways Act and accompanying functions from the Minister of Finance back to the Minister of Public Enterprises.

The transfer was signed by the President on 25 July 2018 and gazetted on 1 August 2018. In December 2014, government announced the move of SAA from the Department of Public Enterprises to National Treasury.

In his update, Gordhan said the boards and executive leadership of both airlines have been tasked with identifying quick wins to stabilise the two State-owned airlines. These quick wins include technical, fuel and route rationalisation.

He said the SA Express board is expected to submit a bankable business model for commercial recovery and long-term sustainability.

In May, the Civil Aviation Authority (CAA) announced the suspension of SA Express’s air operator’s certificate and the certificates of airworthiness (CoA) of nine of the 21 aircraft being operated by the airline.

The CAA reinstated its Aircraft Maintenance Organisation (AMO) certification on 22 June 2018. Subsequently in July, SA Express announced that it was readying itself for take-off.

On Wednesday, Gordhan said SA Express – with its new interim Chief Executive Officer Siza Mzimela – would commence operations next week.

“The entity has received an airline operating certificate from the Civil Aviation Authority and will resume a flight schedule shortly,” said the Minister.

He said the airline plans to build continuously on its flight schedule.

At a media briefing in May, Gordhan said government wanted to merge national carrier SAA with SA Express and Mango, as the three airlines fly to the same destinations.

The Minister told Parliament on Wednesday that SA Express continues to face liquidity and solvency challenges. While government has provided the airline with a government guarantee of R1.74 billion, the department says immediate recapitalisation is required.

In addition, the airline is in the process of finalising its annual financial statements for the 2016/17 and 2017/18 financial year due to going concern challenges.

Gordhan said the lack of revenue generation due to the grounding of the airline has exacerbated the challenges of the airline. This is against the backdrop of allegations of high levels of corruption, among other things.

The Minister also gave the committee an update of other State-owned companies (SOCs) falling within the ambit of the Department of Public Enterprises.

SOURCE: SAnews.gov.za

SAnews.gov.za is a South African government news service, published by the Government Communication and Information System (GCIS). SAnews.gov.za (formerly BuaNews) was established to provide quick and easy access to articles and feature stories aimed at keeping the public informed about the implementation of government mandates.

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Born in Zimbabwe and living in South Africa, Miriro is a seasoned publishing editor and writer, having worked with leading brands in investment, business leadership and entrepreneurship. Passionate about Africa’s development, Miriro is also a dynamic marketing consultant with 10 years experience working with startups and large multinational corporations. With a heart for travel, Miriro spends her time discovering the nooks of crannies of Africa’s hidden gems, taking the roads less travelled, meeting the beautiful people and enjoying their food and culture. She enjoys tackling complex strategic challenges in the passion-to-entrepreneurship pipeline, particularly focused on the implications of 4th Industrial Revolution and workforce automation on Africa's travel and tourism industry. Miriro is currently the Managing Editor of Nomad Africa magazine.

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