Taxi union fails in bid for South Africa’s Mango

The administrator of Mango Airlines (JE, Johannesburg O.R. Tambo) has declined to comment on reports that South Africa’s national taxi association has been unsuccessful in its bid to rescue the stricken state-owned budget carrier.

This followed after a letter from administrator Sipho Sono to the South African National Taxi Council (SANTACO) was leaked to local media, in which he reportedly informed the union it had not been shortlisted as a bidder.

Mango has been in voluntary business rescue since July 28, 2021. It has been mothballed after its parent, South African Airways (SA, Johannesburg O.R. Tambo) decided to sell off the wholly-owned subsidiary. However, Sono believes there is a reasonable chance of rescuing the airline.

In his latest update to creditors, he said “a number of expressions of interest (EOIs)” had been received in December 2021 from potential investors; however, all did not provide sufficient proof of funding. The deadline for submissions was consequently extended to February 4. All would be informed of the outcome of their submissions, and those who met the criteria would be invited to commence their due diligence. Prequalified bidders were expected to submit binding offers before the end of March 2022.

SANTACO on social media confirmed it had submitted a bid to acquire Mango. “We are confident we submitted a formidable bid. We will make a statement this week on the matter, including the business rescue practitioner’s reply letter that was leaked to the media,” the union said.

Running its own low-cost airline has long been an aspiration of the taxi association. In 2011, SANTACO tried to launch its own budget carrier, Santaco Airlines (Lanseria), to serve Eastern Cape rural areas, home to many migrant labourers living in Johannesburg and Gauteng province. Operations were to have involved now-defunct AirQuarius Aviation (AQU, Lanseria). However, bar for one publicity flight, the venture never took off. Another attempt in 2014 also came to nought.

Meanwhile, Sono, SAA, and the shareholder representative Department of Public Enterprises (DPE) met on February 7 to discuss the administrator’s final draw-down request to SAA of the remaining balance of ZAR399 million rand (USD25.8 million) of ZAR819 million (USD53.1 million) in state funds allocated to Mango in terms of a Special Appropriation Act in 2021. The final payment has been outstanding since December 2. For its part, SAA had written a letter to the DPE on January 28 requesting the pay-out. “The DPE has promised to revert with a confirmation on when the funds will be transferred,” Sono said.

Mango’s liabilities to creditors total ZAR2.85 billion (USD187.8 million), including ZAR183 million (USD12 million) in unflown ticket revenue.

All Mango employees whose applications for voluntary severance were accepted have been paid out in full, including arrear salaries. The remaining 105 permanent employees of the airline are facing retrenchment. A labour relations consultation process was initiated on January 26. South African labour law allows for a maximum of 60 days within which the labour consultations must be concluded, whereafter the affected employees may be retrenched.