Low-cost airline Mango is under serious strain, with some employees still awaiting their salaries even though parliament approved a special allocation of R2.7 billion for SAA subsidiaries. Unions are now calling for urgent business rescue.
The Mango Pilots’ Association (MPA) and the SA Cabin Crew Association (SACCA) have written to Public Enterprises Minister Pravin Gordhan, the Department of Public Enterprises (DPE) and the SAA board in a letter dated 15 July, Fin24 reports.
On Friday the MPA and SACCA notified its members of a meeting with the DPE regarding the situation at Mango. Combined, these two unions represent 61% of Mango’s employees. Unlike SAA, Mango was not placed in business rescue.
According to the Special Appropriations Act, R819 million of the R10.5 billion allocated to SAA in the budget last year is intended to go to Mango, R1.66 billion to go to SAA Technical (SAAT) and R218 million to Air Chefs.
Mango Employees’ salaries for June remain outstanding having received partial salaries in the preceding months, except for a few months where they received full salaries. The employees have been receiving partial salaries since April 2020, sometimes as little as 5%. On average, the employees have six months worth of salaries outstanding.
The two unions stating that business rescue has now become urgent with their letter to the DPE and the SAA board. So far, there has been no transfer of the R819 million earmarked for Mango.
This transfer cannot be made until there is a rescue process in place or a restructuring plan is approved by the SAA board.
The two unions state that there is an understanding from the meeting with the DPE to procure its allocation by parliament, Mango would be placed in business rescue.
Mango’s market share dropped from 30% in June 2020 to around 14% by April of this year. When SAA was put in business rescue, SACCA was one of the unions questioning why its subsidiaries were not placed under business rescue as well.
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