Last week, the High Court handed down a judgment compelling Minister of Public Enterprise Pravin Gordhan to decide whether to sell the remains of Mango Airlines or not. This seemingly minor judgment sheds light on several issues that reach far beyond the fate of yet another failed state-owned airline.

The judge went so far as to accuse Gordhan of acting irrationally. I reckon Gordhan is only acting irrationally if you take his words at face value. 

Thabo Mbeki was accused of “Talking left, walking right”. With Gordhan the opposite is true. He claims to be in favour of the privatisation of select state-owned assets, specifically the sale of a majority shareholding in SAA to Takatso — a private sector consortium. Yet all his actions — or lack thereof — suggest that he is doing his utmost to avoid privatising these assets.

This judgment adds to the mounting evidence that Gordhan (presumably following the ANC party line) has never had any intention of selling the remains of Mango — or SAA. 

This defies the compelling arguments that, based on its track record, the current SA government could never successfully operate a low-cost carrier airline. Of all the state-owned enterprises, airlines are the most difficult to operate successfully. They are skills- and capital-intensive and are intensely competitive with customer service being a key market differentiator — yet have paper-thin margins that leave no room for the luxury of a ‘development mandate’.

And so we come to the ongoing saga of the sale of SAA to the Takatso Consortium. Despite claims and promises, Gordhan is blocking the deal, which has been in the making for over two years. 

Government promised that the deal would be concluded by April this year, yet there are still large obstacles to be surmounted. These include: Changing the SAA Act of Parliament to allow ownership other than the state. Then there is the requirement for the Civil Aviation Authority to amend SAA’s Aircraft Operator Certificate. Third, there is the need to amend both the Local and International Air Services Licences. Normally any of these require 12-18 months, yet there is no acknowledgement that real work has been done on any of these requirements. 

An embarrassing obstacle to the Takatso deal must be the vexed issue of the massive windfall that will accrue to Gidon Novick and his partners in Syranix. The current value of SAA is estimated to be in the region of R6-billion, meaning that the 10% owned by Syranix would be worth around R600-million. That’s a good profit on the notional R51 original investment. 

A further intriguing question raised by the Mango judgment is who on earth would want to buy the defunct low-cost carrier? It has no aircraft, as they have all been returned to the lessors. All of the airline’s viable routes have been taken over by competitors. There are very few staff left. Yet a buyer is reportedly prepared to pay R326-million, and there is still the open question as to who will pay the balance of Mango’s debt. 

The tangle of government, private sector interests, ideology and obscene profits makes the whole Mango/Takatso imbroglio a Gordian knot. My best guess is that Gordhan cannot begin to unravel it and is hoping to kick the whole thing down the road until after the 2024 election — or at least until April next year when he turns 75 and can gracefully retire. DM