Airports Company SA pulls plug on Mango

Mango Airlines (JE, Johannesburg O.R. Tambo) was grounded on Wednesday, April 28, 2021, after the Airports Company South Africa (ACSA) banned it from using its airports because of an undisclosed amount of unpaid passenger service charges, landing, and parking fees. ACSA pulled the plug after the airline failed to adhere to its final demands on April 23. The state-owned airport regulator in a statement said it could not extend further credit to Mango, which is the low-cost subsidiary of South African Airways (SA, Johannesburg O.R. Tambo) which has been in business rescue since December 2019. This followed an announcement to staff last week by Mango Chief Executive Officer William Ndlovu that the government had been asked to place the airline into bankruptcy protection from May 1, 2021, until such time as it was able to provide it with financial support. Mango, which by 2020 needed ZAR1 billion rand (USD70 million) in recapitalisation, has been caught in the middle of an ongoing government effort to rescue SAA. The state has diverted ZAR10.5 billion (USD735 million) from other state departments to implement a restructuring plan for SAA, however, this did not include a cash injection for Mango. Contrary to the plan agreed to by creditors, the Department of Public Enterprises (DPE) later tried to divert ZAR2.7 billion (USD189 million) of the amount for SAA’s subsidiaries, but these funds can only be released once certain government processes have been resolved. ACSA said its decision to suspend Mango was not an easy one and was only taken after considerable engagement and discussion with the airline’s management. It declined to disclose the specific amounts owed by the airline. Following several meetings with ACSA, Mango on April 20 had made a written proposal on how to pay its debt. ACSA responded in writing that it could not extend further leeway, in part because previous arrangements concerning cash payments had not been adhered to. “The company is unable to rely on the airline’s proposal for the full settlement of its debt as this is dependent on uncertain events and timing. ACSA advised Mango that should the account not be settled in full by close of business on Friday, April 23, the company would suspend services to Mango. As the settlement payment was not forthcoming, ACSA has informed Mango Airline that it may not operate to or from any ACSA-managed airports from April 28, 2021, until the account is settled in full.” ACSA said its business relationship with Mango was consistent with its approach to airlines generally. It underlined that regulations governing the payment of charges for landing, taking off, and parking of an aircraft accrued “on a daily basis and shall become due on the day they were incurred and shall be payable to the company on demand and in any event before the aircraft departs from the airport”.