Just over six months ago, South African Express suspended its operations indefinitely. Now, it looks as if it may be able to return to the skies in the future. This is after a group of employees was given the green light to buy the airline.
Indefinite suspension of operations
SA Express is one of many carriers to have suffered economically due to the ongoing coronavirus situation. COVID-19 has had financial implications at every level of the aviation industry. However, the loss-making airline was in trouble even before the pandemic grounded the majority of commercial flights.
SA Express was founded in April 1994. It operated as the regional partner carrier for South African Airways, utilizing Dash-8 turboprop and Bombardier CRJ aircraft. It served “most destinations within South Africa and services between Botswana, Namibia, Democratic Republic of Congo, Zambia, and Zimbabwe,” according to South African’s website. However, on March 17th, 2020, the regional airline announced that it would be suspending its operations indefinitely the following day.
NOTICE: SA Express announces that it will suspend operations from 18 March 2020 until further notice. Read full statement here:https://t.co/RGIcYL83zO pic.twitter.com/uGejox6QXw
— SA Express (@flySAExpress) March 17, 2020
Long-term financial struggles
Although the pandemic was the final nail in the coffin, this suspension was ultimately the culmination of several factors that had jeopardized the airline’s future in recent years. As Simple Flying reported at the time, SA Express had previously been considering grounding due to its financial instability. Its problems had begun in May 2018, when the South African Civil Aviation Authority grounded the airline citing serious safety concerns, according to fin24.
As reported by Aviation Week, SA Express was able to recommence operations three months later in August 2018. However, its problems continued the following summer, with the carrier being banned from its home airports over unpaid debts.
Shortly afterward, it received a government bailout of around $20 million, in an attempt to negate some of its estimated $70 million losses from the previous decade. However, the unexpected hurdle of the coronavirus pandemic left the carrier with “nowhere to hide”. As such, it was forced to indefinitely suspend its operations six months ago, before being provisionally liquidated on April 28th.
Light at the end of the tunnel
Half a year on, the future of SA Express is beginning to look a little brighter. As reported by Business Maverick, a group of the airline’s employees has emerged as the successful bidder to buy the carrier. The bidding process is said to have attracted at least 17 private-sector investors.
Known as ‘Fly SAX’, the new company will have to raise at least 250 million South African Rand (just under $15 million) over the coming weeks. This should provide sufficient capital to recommence the airline’s operations. It will team up with the crowdfunding platform ‘Uprise.Africa’.
Business Maverick further reports that that Fly SAX has not yet been able to provide any money to support their proposal. Despite this, it was still able to win favor with the provisional liquidators. This is because it “seeks to empower SA Express’s 691 workers (…) at the center of the airline’s future ownership model, and not the state.”
It will certainly be interesting to see whether these hopeful plans can get SA Express back into the skies in the coming months.
Have you ever flown with SA Express? How do you see this attempted purchase panning out? Let us know in the comments.