Underequipped – it only has two aircraft. Overstaffed – it has 749 employees when it only needs 100.
The approval of the R819m (€48.3m) taxpayers’ bail-out for Mango, whose future is far from secure, has raised eyebrows in aviation circles.
The contentious 2021 Special Appropriations Act has been signed off by President Ramaphosa and is now South African legislation. This will see R2.7bn (€159.3m) of SAA’s business rescue funds transferred to SAA subsidiaries, including a bail-out of R819m directed to SOE, LCC Mango Airlines.
Mango Airlines HOD: marketing and communications, Benediction Zubane, confirmed to Tourism Update that the passing of the 2021 Special Appropriations Act meant that the R819m earmarked for Mango was on its way to the airline, which has been battling a cash-flow crisis for the last two months.
Mango has also updated its website and has loaded flights for the next few days, which, at time of publication, reflected until July 4. No flights beyond this date have been loaded yet.
Mango’s website still lists the following routes:
- JNB-Cape Town
- JNB-Durban
- JNB-East London
- JNB-George
- JNB-Port Elizabeth
- JNB-Zanzibar
- Cape Town-Bloemfontein
- Cape Town-Durban
However, a leaked internal letter to staff from Mango’s acting CEO, William Ndlovu, published by The Citizen last week, revealed that Mango’s fleet now comprised only two aircraft (of its original 14).
Commercial aviation expert, Keith Green, said it was believed that Mango’s other aircraft had been returned to their lessors following the April ultimatum that lessors gave the airline to pay up or have the multiple leased aircraft grounded.
Green said with a fleet of only two aircraft, Mango would have to cut a number of its routes, as two aircraft could only really service a maximum of three routes, depending on how frequently the airline intended to operate on any particular route.
He added that the bail-out of Mango using taxpayers’ funds was particularly concerning as the airline had not announced any intention to restructure its operations. According to The Citizen, Mango currently employs around 749 staff members, and Green says Mango’s staff numbers are hugely disproportionate.
“Prior to Covid-19, the LCC Ryanair employed an average of 38 employees per aircraft and another LCC, easyJet, employed an average of 44 people per aircraft. Working on these LCC staff-to-aircraft ratios, and making allowances for a complement of head office staff to run reservations, accounts and other functions, Mango’s employee number should still not be anywhere near 749.”
Airlink CEO and MD, Rodger Foster, told Tourism Update that, as a rule of thumb, there should be no more than four sets of flight crew designated per aircraft and this would amount to 24 crew members per aircraft. “Based on a fleet of only two aircraft, an airline that outsources its aircraft maintenance services should not need to employ more than 100 staff members,” said Foster.
He also said that a fleet of two aircraft could only operate one single route effectively, as the second aircraft would need to be kept on standby in case technical issues arose with the first aircraft.
Responding to Tourism Update’s queries about Mango’s fleet, Zubane said: “We are operating a triangle route flying Cape Town-Durban-Johannesburg with the two aircraft that are available for us to use.”
With Airlink a creditor of SAA that is still owed many millions of rands, Foster was frustrated that the 2021 Special Appropriations Bill had been approved and that R2.7bn of SAA’s business rescue funds were being directed to SAA’s subsidiaries rather than SAA’s creditors.
He confirmed that Airlink had not received any payments from SAA since the airline had entered business rescue. He reiterated that SAA’s approved business rescue plan had not included R2.7bn in funding for the subsidiaries and asked why Mango’s shareholders and board of directors were not complying with the law by placing Mango in business rescue if its financial position was dire enough to require a bail-out.
“On what basis can SAA’s board of directors justify paying across R819m to an allegedly insolvent subsidiary? It needs to be questioned on what basis SAA is providing financial assistance to its subsidiary,” said Foster.
- Tourism Update
