South African Express Seeks State Approval for Emergency FundingKamlesh Bhuckory
State-owned airline South African Express is seeking government approval for a bank loan after entering insolvency and being unable to pay debts.
An application has been sent to the National Treasury to allow the regional carrier to borrow the money, Dipuo Letsatsi-Duba, chairman of the government’s portfolio committee on public enterprises, said today in a statement. The airline has put cost-saving measures in place to curb waste, she said.
The carrier’s management said “agreements had been reached with service providers to address the challenge,” according to the statement. “The entity needed to raise funds with the bank but the bank needed a shareholder agreement to secure the loan.” The company didn’t immediately return a voice message seeking comment.
South African Express joins larger state-owned airline South African Airways in needing funds to stay afloat. SAA is “technically bankrupt” and surviving off state-guaranteed loans, Public Enterprises Minister Lynne Brown has said. A 90-day recovery plan for SAA was handed to South Africa’s government earlier this month.
South African Express operates a fleet of 24 Bombardier Inc jets ranging in size from 50 to 74 seats, according to the company’s website. It flies within South Africa and to neighboring countries including Zimbabwe, Namibia and Mozambique. Mango Airlines SOC Ltd., SAA’s low cost unit, is profitable and adding routes.