After SAA, SA Express slips into business rescue process

February 06, 2020: Another airline to follow the path of South African Airways (SAA) is SA Express, which has been served with an urgent court application to be placed under business rescue.

As per EWN, transport and logistics company Ziegler filed the application in the High Court in Johannesburg in January 2019, in a bid to recoup around R11 million in debts. This spells more trouble for the state-owned airline, which is facing several debt-related problems.

SA Express said it was considering the contents of the judgment and intended appealing the matter.

Solidarity's Anton van der Bijl said that the judgment was a result of operational issues. "It seems that the gist of the problems lies in poor management and decisions."

It's understood that Ziegler no longer had a contract with SA Express as the SOE cancelled the agreement in February last year.

The small-scale domestic airline has been suffering from turbulence over the past few years. It was unable to pay its bills, and recently, they had their operating license revoked over safety fears. There are also numerous allegations that the operation was used for the purposes of looting by government officials.

SA Express limped into 2020, but it doesn't look like it will be going anywhere fast. 

According to the Public Enterprises Department's statement, the business rescue will allow SA Express and SAA, who also scored an R3.5 billion bailout in January to continue operating for the time being. SAA has been operating under business rescue while practitioners develop a business plan intended to assist the crippled airline's recovery. A team of business rescue experts have to present the plan by the end of February.

SAA is going to face probe from special government investigators upon South African president Cyril Ramaphosa's orders. The president stated in January 31 government gazette that he believed the airline to have operated corruptly dating back to at least 2002.