Mango Airlines, the subsidiary of South African Airways, could be fully privatised
Due to financial and operational problems, Mango Airlines went into voluntary restructuring on 10 August. It is now envisaged that it will be completely spun off from its parent company, South African Airways (SAA) and put back in the air.
A full privatisation. This is what the administrator of Mango Airlines is proposing for its rescue. This is what emerges from the business rescue plan published by Sipho Eric Sono on 29 October 2021, and consulted by ch-aviation. The Grant Thornton administrator is proposing a total sale of the company simply because its current owner, SAA, is not prepared to inject more than the R819 million ($57.3 million) currently earmarked for its rescue.
Until a future investor can be found, the administrator is proposing that the low-cost subsidiary of South Africa's national airline should continue to be suspended, or that it should be resumed by December (with public funding). Under this second option, only the Johannesburg - Cape Town, Johannesburg - Durban and Cape Town - Durban routes would be reopened with an initial fleet of three Boeing 737-800s.
The re-launch of Mango's flights would be aimed at taking advantage of the high demand in the peak season (during the festive season), but also at preserving the airline's route rights and licences. In the event that Mango resumes operations, the latter two elements could be a factor in negotiations with a potential future private shareholder. Once privatised, Mango would move to a fleet of eight 737-800s (owned by Macquarie) by December 2022.
As a reminder, in 2019 (before the Covid-19 pandemic), Mango Airlines made an operating profit of ZAR 977.5 million (USD 63.8 million). But in 2020, its profit dropped drastically to ZAR462.8 million (USD30.2 million). As of 19 April 2021, its total debt was estimated at R2.5 billion ($168.4 million). To date, Mango has only received ZAR100 million of its ZAR819 million government allocation, largely to fund salaries (about 700 employees).
