FlySafair still wants to buy loss-making Mango

18 Nov 2016

Mango Airlines' net loss of almost R37-million hasn't deterred FlySafair from wanting to buy the South African Airways-owned carrier. "Mango's fleet and operating model is closer to FlySafair's low-cost approach, and would be a more natural extension to FlySafair's successful business model," FlySafair CEO Elmar Conradie said on Thursday.

Bob Adams via Wikimedia Commons

"Operating a larger fleet would afford us the opportunity to enjoy even larger economies of scale and through this, sustain lower fares to the flying public."

Mango's loss emerged in Parliament on Wednesday when its financial results, which are normally consolidated and hidden in its parent company's statements, were released for the first time to the finance committee after persistent pressure from the Democratic Alliance.

It came despite the airline carrying three million passengers last year, a 21% increase over the previous year, and FlySafair pointed out that Mango's loss occurred "despite the Airports Company of South Africa noting a trend towards an increase in domestic passenger traffic, which it has seen across its route network".

Mango chairman Rashid Wally's statement to the finance committee partially blamed the "weakening economy and over-traded market impacting average fares", but FlySafair said: "Mango's loss comes even though it has been accused of allegedly engaging in predatory pricing as it sub-leases aircraft from its parent company, SAA, at discounted prices, allowing it to price flights at below operational costs."

FlySafair's head of sales and distribution, Kirby Gordon, said: "As it stands, we are achieving a pleasingly low operating cost per seat, which is allowing us to contest the market at the current low fares."

Gordon also said selling Mango "would also take some financial burden off the government."

TMG Digital

Source: BDpro

Source: I-Net Bridge

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