Public Enterprises minister Pravin Gordhan has announced that the merger between South African Express Airways and South African Airways (SAA) is now under way.
“The first step of consolidating SA Express with SAA has just been concluded, which was to place both airlines within one shareholder ministry,” he said during a presentation to Parliament’s Portfolio Committee on Public Enterprises yesterday.
Gordhan said that the boards and executive leaders of both state-owned airlines had been tasked with identifying ways to stabilise the entities as quickly as possible, including the use of technical, fuel and route rationalisation.
He announced plans to merge the two airlines, along with Mango, during a press briefing in May this year as they all flew to the same destinations and both SAA and SA Express were facing liquidity and solvency challenges against a backdrop of allegations of high-level corruption.
Earlier this year, the Civil Aviation Authority (CAA) grounded SA Express after suspending its operating licence and aircraft maintenance certification which Gordhan said had exacerbated the financial challenges of the airline as it had been unable to generate any revenue during that period.
SA Express is currently in the process of finalising its annual financial statements for the 2016/17 and 2017/18 financial years and the board is expected to submit a bankable business model for commercial recovery and long-term sustainability soon.
Government has provided the airline with a R1.74-billion guarantee but Gordhan noted that the airline still required immediate recapitalisation. The airline is set to commence operations next week.