FlySafair (FA, Johannesburg O.R. Tambo), the budget subsidiary of South African ACMI/charter specialist Safair (FA, Johannesburg O.R. Tambo), has reiterated its interest in acquiring Mango Airlines (MNO, Johannesburg O.R. Tambo) despite the state-owned LCC having registered a net loss of ZAR36.9 million (USD2.55 million) for its latest financial year.
FlySafair CEO Elmar Conradie told The Herald newspaper last week that given their fleet commonalities and similar operating models, Mango would be an easy fit for his airline.
“Mango’s fleet and operating model is closer to FlySafair’s low-cost approach‚ and would be a more natural extension to FlySafair’s successful business model,” he said. “Operating a larger fleet would afford us the opportunity to enjoy even larger economies of scale – and through this‚ sustain lower fares to the flying public.”
At present, Mango operates ten B737-800s on flights connecting South Africa's major cities - Johannesburg served through Johannesburg O.R. Tambo and Johannesburg Lanseria as well as Bloemfontein, Cape Town International, Durban King Shaka, George and Port Elizabeth - with Zanzibar its only international destination. For its part, FlySafair operates B737-400 and B737-800 metal sourced from its Safair parent on flights that cover South Africa's largest trunk routes. It offers no international services as yet.
Meanwhile, South African Public Enterprises Minister Lynne Brown has told parliament that government was now looking to establish a single holding company to encapsulate Mango along with South African Airways (SA, Johannesburg O.R. Tambo) and South African Express (EXY, Johannesburg O.R. Tambo). Once done, Pretoria will then seek out a suitable strategic partner to acquire a 25% stake in the firm she said adding that a full merger of the three airlines was "highly unlikely".
In February, Finance Minister Pravin Gordhan announced provisional plans to merge the SAA and South African Express into a single entity in a bid to streamline costs as well as operational efficiencies.
South Africa's privately-owned airlines have long derided the South African government for propping up its coterie of loss-making carriers through continuous state subsidies. This, they argue, creates an uneven playing field rendering one the world's most competitive markets even more difficult to compete in.
Over the past twelve months alone, the tough operating environment has already claimed the scalp of one carrier, SkyWise (Johannesburg O.R. Tambo), with another, Fly Blue Crane (Johannesburg O.R. Tambo), now warning it may need to enter into business rescue should talks with strategic investors fall through.
