- The first meetings in terms of the business rescue process of low-cost airline Mango, took place this week.
- Unions were told that, if all goes well, Mango might have a proposed business rescue plan by the end of October.
- Employees also expect their outstanding salaries for July to be paid once the airline receives R819 million in approved funding.
Low-cost airline Mango's first meetings as part of its business rescue process took place on Wednesday, with employee representatives and creditors being briefed on the steps ahead.
Among other things, employees expect to be paid their outstanding salaries for last month.
The voluntary business rescue process was approved as from 28 July, and the goal is to have a proposed rescue plan by the end of October.
Rescue practitioner Sipho Sono of Opis Advisory said one meeting was with the airline's creditors and the other with unions and representatives of non-unionised employees.
He said he was satisfied with the process so far. "The next steps will be setting up several meetings with the various committees established. More details will be provided as the business rescue process unfolds," said Sono.
Jordan Butler, chair of the Mango Pilots' Association (MPA), said the aim is to have a proposed rescue plan by 29 October. At the meeting with unions, it was indicated that there was provision for outstanding salaries to be paid for July, and that salary payments for August and September would also be possible, Butler said.
However, said Derek Mans, trade union Solidarity's aviation and defence organiser, Sono asked payroll to wait until it was confirmed that Mango had received its promised allocation of R819 million, taken from R10.5 billion allocated to SAA's business rescue plan.
Like Butler, Mans said there were indications that Mango has a reasonable prospect of being rescued.
But it remains unclear when the airline will be up and running.
"No indication was given yet as to when Mango will restart operations, but the rescue practitioner said it was critical that we start as soon as possible. He does not think we will have to wait to restart operations until a rescue plan is finalised. He also understands that staff cannot be expected to work without being paid," said Butler.
"I am optimistic that at least they are providing for salaries. It will go long way to show their sincerity about looking after staff and actually getting the rescue process properly underway and getting us operating again as soon as possible."
Mango currently has a few of its planes in storage with its parent company South African Airways (SAA).
Unions plan to meet on Friday to discuss the nomination of Ralph Lutchman, also a rescue practitioner, as committee chair for employees during the rescue process.
A presentation during the meeting indicated that Mango does not have sufficient resources to pay its current obligations when they fall, which was attributed to the impact of the Covid-19 pandemic on the aviation industry. The airline did not generate any income when flights were suspended during the hard lockdown between March and June 2020.
"The approved level of funding is sufficient to fund the restructuring of Mango, and, should additional funding be required, it will be available. There is support from all stakeholders," according to the presentation.
On Wednesday, Kgathatso Tlhakudi, director-general of the Department of Public Enterprises, which is SAA's shareholder, told Parliament's Portfolio Committee on Public Enterprises that, if it did not have the R819 million post commencement funding, it would have ended in the same situation as state-owned regional airline SA Express. SAX is currently in provisional liquidation after its own business rescue process ended.
"The business rescue process will advise on the long-term future of Mango. The DPE is hopeful that the business rescue will be concluded within the three months allowed by legislation," said Tlhakudi.