South African Express (EXY, Johannesburg O.R. Tambo) has resumed flight operations after the Airports Company South Africa (ACSA) agreed to restore services to the embattled state-owned carrier effective 1200L on Friday, August 30, 2019.
According to a South African Parliamentary Portfolio Committee on Public Enterprises statement, the embargo, which saw the airline grounded for three days, was lifted after SA Express partially settled its debt.
"The committee hopes for a speedy and sustainable agreement between SA Express and Airports Company South Africa (ACSA)," chairman Khaya Mgaxa said in a statement.
Interim Chief Executive Officer (CEO) Siza Mzimela told a committee hearing on Friday that the grounding was attributed to various issues facing the airline.
She said these include a weak balance sheet, frozen credit lines, liquidity challenges, long outstanding debt, and a significant monthly cash bill.
Deputy Minister of Public Enterprises, Phumulo Masualla, told the committee that the airline's turn-around plan rests on an injection of resources. The ZAR1.249 billion rand(USD85.74 million) disbursed to SA Express by the Treasury in February this year, he said, had been used to settle government-guaranteed debt only and was not nearly enough to cover its turnaround problem. As such, SA Express has been left with no working capital given an overdraft facility, extended to the carrier by RMB Bank, was cancelled following its settlement using the recapitalisation funds.
"ACSA's action of grounding the flights is thus attributed to SAX's inability to pay the legacy debt of around ZAR71 million (USD4.68 million)," the statement added.
SA Express has since asked the Treasury for a government guarantee of ZAR300 million (USD19.76 million). However, Mgaxa said that in the event the funding was not availed, the airline should explore other options.
