The flight operations of Mango Airlines, the cash-strapped low-cost local carrier, were suspended on Wednesday 28 April, leaving many passengers stranded at various airports in South Africa.
Mango has not provided reasons for why none of its scheduled flights didn’t take off at airports on Wednesday morning. But Business Maverick understands that Mango flights were suspended due to its failure to pay landing and takeoff fees at airports across the country.
Airlines such as Mango are required to pay the Airports Company South Africa (Acsa) fees for take-off, landing, or parking aircraft at nine airports in SA that are managed by Acsa, which is a state-owned entity. Mango is also state-owned and a subsidiary of South African Airways.
Mango was not immediately available to respond to Business Maverick’s request for comment via email, text message and phone.
Mango is battling to stay afloat and faces a financial crisis so daunting that it might not be able to pay the salaries of its 500 workers from May. It has also failed to pay airport-related fees, resulting in the airline’s aircraft being blocked by Acsa from taking off or landing at its airports until payments are made.
Mango has suspended all its flights at Acsa’s airports including OR Tambo International Airport in Johannesburg, Cape Town International Airport, George Airport, and King Shaka International in Durban.
Mango customers were left stranded on Wednesday morning at various airports and couldn’t be processed into scheduled flights. On Twitter, Mango has apologised for “flight interruptions and delays”, adding that it is “working on a solution”. It’s unclear whether the “solution” involves refunding customers or rebooking them into other operational airlines.
“We…will be back at the [Mango airport] counters and hope to clear the delays as soon possible,” Mango said on Twitter.
Acsa confirmed that it grounded and suspended Mango flights due to “outstanding debt” – the amount of which it didn’t disclose. Acsa said the outstanding debt is part of confidential terms and conditions it entered into with Mango.
Acsa has since lifted the suspension of Mango flights after the airline “made part payment today [Wednesday] towards the amount owed to Acsa for landing fees, parking fees and passenger service charges.”
“The airline has made further undertakings to settle the remaining debt. It is under these circumstances that Acsa has agreed to lift the suspension on Mango Airline,” said Acsa.
The lifting of the suspension means that Mango can resume its flights from Thursday 29 April at Acsa airports.
The grounding of Mango is earlier than anticipated as its acting CEO William Ndlovu informed workers on 22 April that the airline would temporarily suspend flights on 1 May because it is fast running out of cash and cannot pay creditors.
Mango owes money not only to Acsa but also to companies that it leases aircraft from for its flight operations, some of whom have already knocked on its door for repayments. Aircraft lessors alone have demanded payment by 30 April 2021 or else will refuse to supply the airline with aircraft.
Ndlovu informed Mango workers that the airline will fail to honour the 30 April deadline, which will result in its flight operations being “temporarily” stopped. Read more here: Mango Airlines set to be grounded as it fails to pay creditors
It’s not clear how much money Mango owes creditors, including Acsa and aircraft lessors, as its audited financial statements are never released for public consumption. Mango recently refused to disclose the amount of money it owes creditors, only telling Business Maverick that “the amount is significant”.
The Mango executive management and interim board have been in talks since early 2020 with the Department of Public Enterprises about a taxpayer-funded bailout for the airline and for it to be placed under business rescue – just like SAA.
Only SAA – and not its subsidiaries including Mango – has been placed under business rescue. The Department of Public Enterprises said it is in discussions with the Mango board and the interim board of SAA about repositioning the national carrier’s subsidiaries in light of delayed government funding.
The SAA business rescue practitioners estimated that Mango requires a bailout of about R1-billion to recapitalise its balance sheet and pay debt.
A business rescue process would buy Mango time and breathing space as outstanding payments to creditors would be immediately suspended until the airline’s operations have been successfully restructured. BM/DM
- Article amended to include Acsa’s comments.