South African Airways (SA, Johannesburg O.R. Tambo) has confirmed it has been cautioned by the country's air services regulator of possible legal transgressions but stressed these are administrative and do not impact its current or future operations.

In a statement on August 12, SAA confirmed it had received a letter from the country's Air Services Licensing Council (ASLC) citing "a few possible breaches" of the Air Services Licensing Act. The council required certain information from SAA to ascertain its compliance with the legislation.

"SAA is currently studying the contents of the letter and will be responding fully to the ASLC within or before the timeframe provided by the council," the airline stated.

"SAA assures its customers and the public that the matters raised in the letter are of an administrative nature, relating to the SEP (strategic equity partner) transaction that is currently being negotiated by the Government, as the shareholder, as well as issues relating to SAA's interaction with the ASLC, the submission of financial statements, and internal staff movement.

"The questions raised in the letter do not impact SAA's current and future operations as well as the quality of the services provided by SAA. To that end, both local and regional services are continuing uninterrupted," SAA said.

According to the August 3 letter leaked to Fin24, the ASLC has given SAA 90 days to address four alleged breaches of the Act or risk losing its air service licences.

The first alleged breach was SAA's failure to formally notify the ASLC of its strategic equity partnership plans with private sector consortium Takatso. Negotiations between the shareholder representative Department of Public Enterprises (DPE) and Takatso have been dragging on for more than a year. According to the letter, SAA told the ASLC that the transaction was at the "pre-closing stage" and that regulatory processes would be concluded after that.

The Takatso consortium consists of black empowerment asset management firm Harith General Partners (30% owned by South Africa's Public Investment Corporation (PIC), which manages civil servant pensions) and ACMI specialist Global Aviation Operations (GE, Johannesburg O.R. Tambo). In terms of the deal, Pretoria has provided ZAR14.6 billion rands (USD901.3 million) to absorb SAA's historical debt, while Takatso will inject ZAR3 billion (USD185 million) in working capital.

According to the ASLC letter, a second possible breach was that SAA had not submitted an up-to-date guarantee for the total value of sold but unflown tickets.

Thirdly, as required by law, SAA did not obtain the council's approval for workforce changes, including the current chief executive, and managers responsible for flight operations and aircraft, and air safety.

Lastly, SAA must submit certified financial statements to the ASLC for the year to date, in line with the council's legal duty of ensuring that SAA operates "a safe and reliable air service".

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Mango Airlines (JE, Johannesburg O.R. Tambo) has been grounded for another two years because South Africa's Air Services Licensing Council has suspended its licenses for the same period, effective immediately, on regulatory grounds.

The move calls into question the current investor process, under which terms an unnamed consortium has been given until August 10 to present a bank guarantee in favour of Mango for an undisclosed purchase offer.

Following a meeting with Mango administrator Sipho Sono on August 3, Air Services Licensing Council Chairman Musa Nsibande penned a letter to him on the same day, informing him that Mango's licenses - Number S890D and Number N891D – had been suspended for two years, effective immediately, as Mango had not operated the licensed air services for an uninterrupted period exceeding 12 months. In so doing, Mango had failed to comply with Section 20(1) of the Air Services Licensing Act. No. 115 of 1990, which warranted the suspension and/or cancellation of its existing licences, he said.

Sono told Fin24 the Licensing Council was effectively...

An unnamed consortium bidding to rescue South Africa's stricken state domestic carrier Mango Airlines (JE, Johannesburg O.R. Tambo) has presented "adequate and satisfactory proof of funding in the form of a bank confirmation letter" to the airline's administrator.

This is disclosed in Mango's latest status update to creditors by administrator Sipho Sono, who said: "Significant progress has been achieved with one of the bidders".

He said the consortium had been given until August 10, 2022, to provide a bank guarantee in favour of Mango for the full purchase offer. If this condition is met, Sono would - under the terms of South Africa's Public Finance Management Act - prepare a detailed proposal for the government to consider the offer per the adopted business rescue plan. The proposal would be submitted by Mango's parent, South African Airways (SA, Johannesburg O.R. Tambo), to the shareholder representative, the Department of Public Enterprises (DPE).

Should the government approve the offer, Sono would process the dividend distribution to creditors, whereafter he will file a notice of substantial...

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