Several ex-South African Express service providers turned creditors have launched separate court applications to have the state-owned carrier declared bankrupt given its failure to meet its debt obligations.

Citing Gauteng High Court documents, the Daily Maverick said that among the applicants was Ziegler SA which filed an urgent application in Johannesburg on Friday, January 17, in which it sought to have SA Express placed under business rescue, the South African equivalent of US Chapter 11 bankruptcy protection.

The logistics and transport firm, which specializes in freight forwarding, customs clearing, warehousing, and supply chain management, cited the carrier's failure to pay ZAR11.3 million rand (USD780,000) for the local and international transportation of engine and aircraft parts for maintenance over a two-year contract running from February 18, 2017 to February 17, 2019. Ziegler SA said that over the course of these years, SA Express had rarely, if ever, met its obligations on time resulting in Ziegler having to extend the grace period for payment from the previously agreed 30 days to 60.

While the hearing is scheduled for Tuesday, January 28, 2020, SA Express has been given until Monday, January 21, to decide whether it will oppose the application. Ziegler SA wants Daniel Terblanche and Phahlani Mkhombo to be appointed joint business rescue practitioners of SA Express. However, if the business rescue application is not granted, Ziegler SA wants SA Express to be liquidated.

An SA Express spokeswoman has since told ch-aviation in a statement that it has yet to be served papers by Ziegler and that, if so, it would oppose the application.

"SA Express would like to add that if an application was indeed made by the supplier named in the articles, it would be under malicious intent as the supplier has been identified as one who seeks benefits from irregular contracting. This supplier is one of many who are currently under internal review for serious abuse of the procurement system, unfair pricing and overcharging.

"SA Express also points out that suppliers who have obtained contracts legitimately are compliant in working with the airline to ensure that payments are reasonable for both parties, while those with dubious contracts constantly bulldoze to ensure that they get their way before the conclusion of irregular contract investigations.

"Actions like these, from such suppliers also undermine the efforts made by SA Express to recover and rebuild governance within the business that has been crushed by corruption, as well as the reputation that the airline is working tirelessly to rebuild," it said.

According to the Daily Maverick report, SA Express is also facing at least three more liquidation applications from disgruntled former service providers. Among them is Flyfofa Airways (FOF, Pretoria Wonderboom) which is claiming ZAR18.7 million (USD1.29 million) from the airline, Mothebe Shuttle Services (ZAR1.5 million (USD104,000)) and Africa Charter Airline (FSK, Johannesburg O.R. Tambo) (ZAR14 million (USD969,000)).

On the back of years of mismanagement and corruption, SA Express has been unable to table its financial results for the past two years. However, a South African Auditor General’s report issued last year said SA Express recorded a loss of ZAR591 million (USD40.89 million) for its 2018/19 financial year and is technically insolvent given its current liabilities exceed its current assets by ZAR374 million (USD25.88 million). As such, the airline has relied entirely on its sole shareholder, the South African government, for funding. In 2019, it received a total of ZAR1.5 billion (USD103.8 million) from the fiscus.

Even if SA Express is able to avoid liquidation, its future still remains uncertain given it is entirely reliant on South African Airways (SA, Johannesburg O.R. Tambo), a fellow state-owned enterprise that is currently in the midst of business rescue and whose future is equally uncertain, for its distribution and revenue accounting.