Can Mango Airlines survive financial turbulence?

Last week, the Airports Company of South Africa banned Mango Airlines from using its facilities, effectively grounding the airline, and causing an uproar among passengers.

Mango, which falls under the wing of the embattled SAA, is one of just four discount carriers available to South Africans traveling domestically.

Those in search of cheap seats can still benefit from Lift Airlines and Kulula.com’s limited offerings as well as ongoing Flysafair specials to Cape Town and other major destinations.

Unlike most airlines worldwide, Flysafair has weathered the ongoing travel restrictions well, and once expressed an interest in buying Mango if it was offered for sale without any of its ties to SAA.

Will Mango survive?

The dispute arose over Mango’s outstanding fees owed to the Airports company of South Africa and was resolved on Wednesday after the parties agreed on a payment arrangement.

The challenging negotiations mean that Mango airlines was back in business on Thursday, but the future still looks turbulent for this branch of the still-grounded SAA. The national carrier’s ongoing financial troubles were only exacerbated by South Africa’s stringent lockdown measures, causing the airline to suspend its operations in March 2020.

Coincidentally, the move by ACSA against Mango takes place almost a year to the day after the government decided to close SAA and start a new carrier.

This move however, never came to fruition, and this year on 20 April, government announced that the airline will indeed reopen after a 15-month long business rescue initiative. In the process, it’s trimmed its employees from 5,000 to 1,000 and is likely to appoint yet another new board to run its operations.

The South African government promised to fork out another R10.5 billion including R2.7 billion for its subsidiaries in October last year. Mango still hasn’t seen its share of the handout though.

Until now, Mango has managed to escape much of the drama associated with SAA, and still disputes the claim by ACSA. It is still far from out of hot water, as it also owes money to the leasing company which owns most of its airplanes.

On 1 May, the airline announced that it would continue flights as usual throughout May, barring the recently suspended Zanzibar route. Mango expects to receive its funds from the government in June, although the latter has remained tight-lipped about the fate of SAA’s subsidiaries.

What will happen if Mango goes bust?

The demise of Mango would mean that around 30,000 passengers would have to look elsewhere for their budget flights.

With demand for flights still lower than usual, this shouldn’t impact prices too much, but that won’t last for long, especially since Kulula.com’s already reduced its weekly offering with regular Flysafair specials to Cape Town, Johannesburg and the rest of the country.

Once the domestic airline market gets back into full swing, there’s likely to be an increase in demand, resulting in higher prices.

For now, domestic travellers on a budget can still depart as planned but the future remains uncertain for Mango unless SAA manages a miraculous recovery.


Sources provided and:
https://www.sabcnews.com/sabcnews/a-decision-to-shut-down-saa-reached-ntm/
https://simpleflying.com/mango-acquisition-eyed-by-fly-safair/
https://www.sabcnews.com/sabcnews/saa-interim-ceo-says-plans-to-restart-the-airline-are-underway/

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