South African Express needs government intervention

Limited funds have had an impact on the engine overhauls required for the grounded aircraft, public enterprises minister Lynne Brown said in a written reply to a parliamentary question made by Congress of the People MP, Deidre Carter.

As of January, all but one of the grounded aircraft had been out of action for more than a year with the days out of service totalling 455, 358, 415 and 253 respectively. The age of the SAX fleet has long been a concern for the airline and has compromised its operational reliability and profitability. While its aircraft were grounded, it had to make use of chartered planes, Brown said, to "maintain the schedule [and] protect market share as well as revenue".

Costs

The minister revealed that between January 2016 and January 2017, SAX used chartered airlines on 5,772 flights with 3,032 of these being provided by charter airline company, Solenta Aviation, and 1,728 by Star Air Cargo.

SAX has 22 aircraft at its disposal of which 18 are leased. The average age of the four it owns is 18 years. Brown said it would cost about $11.7m (about R150m) to get the planes operational again and SAX opted late in 2016-17 to lease engines to save on costs. This reduced the amount required to $6.5m (about R85m) excluding the monthly cost of about $600,000 "to service the component exchange and engine-support agreements".

Last month, Brown revealed the extent of SAX's financial problems when she said in Parliament that it was unable to repay R150m to two banks. Government intervention was required to reach a settlement on a repayment plan. She told MPs that the airline continued to face profitability and liquidity challenges.

Source: BDpro