March 12, 2020: South African carrier FlySafair has expressed its interest in buying Mango Airlines, the low-cost arm of South African Airways (SAA) if it is put up for sale by the cash-strapped national carrier.
Mango Airlines was founded in 2006 and operates mostly domestic routes within South Africa.
FlySafair management has approached SAA’s administrators about a possible acquisition of Mango Airlines, chief executive officer Elmar Conradie told Bloomberg. However, the business rescue practitioners made clear that their priority is to complete a turnaround plan of the main carrier due at the end of March.
“The only one that makes sense is Mango,” Conradie said when asked if he would be interested in any future SAA asset sales. A move for SAA Technical, which provides aircraft maintenance, would be “total overkill” given FlySafair’s fleet is already serviced by its parent company, Safair Operations, informed the agency.
In September 2019, plans to merge South Africa's three state-owned airlines, SAA, Mango, and SA Express were discussed by the department of public enterprises.
South African government put SAA into bankruptcy protection on December 5, 2019, to end a damaging cycle of state bailouts and ever-mounting losses. The administrators have cut a number of routes, including all domestic flights except Johannesburg-Cape Town.
Last month, South Africa’s National Treasury shared that it will provide a $1 billion bailout for the country’s flag carrier. However, this decision has been met with criticism by many members of the nation’s public due to the funds being spent on the airline.
FlySafair, which began operations six years ago and flies to seven destinations around the country, has at the same time been adding routes and increasing frequencies. The carrier will announce a new Johannesburg-Durban service next week, Conradie informed and is steadily upgrading its fleet of 17 ageing B737-400s to modern B737-800s.
FlySafair sees capacity increasing by 15 percent this year, and the airline has yet to see any impact on bookings from the spread of the coronavirus.
FlySafair attempted a tie-up with fellow domestic carrier SA Airlink two years ago, but the merger was abandoned following opposition from the Competition Commission. A move for Mango will likely face similar regulatory scrutiny, but the need for new shareholders for state aviation assets may outweigh that concern, Conradie said.
FlySafair is a division of Safair Operations. Twenty-five percent is owned by Safair Holdings and 25.14 percent by an employee ownership scheme called Ndizasafair Holdings. The remaining 49.86 percent is owned by the company directors by way of the Safair Investment Trust.