When the domestic market is facing challenges , South African Airways (SAA) has 90 days to address material breaches of aviation law or risk losing its licences , the Air Services Licensing Council (ASLC) has warned in a letter.
Recent developments have shrunk the air trevel options in the country , SAA , Lift and FlySafair remain the only domestic airlines available in a post Pandemic growing aviation market , after Comair stopped operations , while low-cost carrier Mango is very close to closure.
The council has issued SAA with a notice to provide it with three relevant documents within 90 days on the disposal of its majority stake to a private party, Takatso Consortium, failing which SAA's operating licence could be suspended.
Meanwhile , South African Airways has acknowledged the notice from Air Services Licensing Council , and said ,
South African Airways (SAA) confirms receipt of a letter from the Air Services Licensing Council (ASLC) citing a few possible breaches of the Air Services Licensing Act No 115 of 1990 and directing SAA to provide certain information to afford the Council an opportunity to ascertain SAA’s compliance and/or non-compliance with the Act.
SAA is currently studying the contents of the letter and will be responding fully to the ASLC within or before the timeframe provided by the council.
Johannesburg (11th August 2022) – South African Airways (SAA) confirms receipt of a letter from the Air Services Licensing Council (ASLC) citing a few possible breaches of the Air Services Licensing Act No 115 of 1990 pic.twitter.com/howEU8U5gV
— SAA - South Africa (@flysaa) August 11, 2022
It has also added , the notice and reply process will not affect the travellers,
SAA assures its customers and the public that the matters raised in the letter are of an administrative nature relating to the SEP transaction that is currently being negotiated by the Government, as the shareholder as well as issues relating to SAA’s interaction with the ASLC, the submission of financial statements and internal staff movement.
The questions raised in the letter do not impact on SAA’s current and future operations as well as the quality of the services provided by SAA. To that end, both local and regional services are continuing uninterrupted.
The letter , that has been addressed to Rosemary Ramakgapola , the aeropolitical affairs manager at SAA on August 3rd , the council stated it suspected on reasonable ground , that SAA had failed to comply with the Air Services Licensing Act No 115 of 1990.
The council was advised that SAA was at the pre-closing stage of the transaction and would commence with concluding the regulatory processes.
However , the council placed on record the material breaches of the provisions of the Act, which included the failure to notify the council of the transaction with Takatso Consortium.
It said furthermore the transaction which it had engaged in, which would result in SAA not being actively in control of the air service, was a direct breach of the Act.
The second breach was that the guaranteed amount was insufficient , the letter read ,
"Regulation 6A provides that a licensee who operates a Class I air service must submit to the satisfaction of council a guarantee for the total sum of cash receipts of tickets which have already been sold, but which have not yet been rendered by it - which guarantee must be a fair representation of its projected cash flow.“
The third material breach was the changes of “postholders” like the CEO , the council said SAA had new executive members but it had not followed the mandatory process of notifying the council.
The fourth breach was about the propoer management of accounts. Council has asked for a set of audited annual financial statements of the most recently completed financial year certified by SAA’s auditor or the chief executive.
In it's letter , the council has asked South African Airways to ensure the submission of the requested documents within stipulated time. The airline , previously grounded for almost two years under business rescue , only resumed operations late last year.
In another development , the Air Services Licensing Council has already suspended two air services licences issued to low-cost airline Mango , a subsidiary of South African Airways.
The SACCA wants the government to help get Mango Airlines back in the sky. This is after the Air Services Licensing Council suspended the ailing airline's licenses for two years. SACCA President Zazi Nsibanyoni Mugambi says getting Mango back will help create jobs. #DStv403 pic.twitter.com/SFJySufw2y
— eNCA (@eNCA) August 9, 2022
However , the SACCA (South African Cabin Crew Association) wants the government to help get Mango Airlines back in the sky . SACCA President Zazi Nsibanyoni Mugambi says getting Mango back will help create jobs.
