Mango Airlines’ administrator is seeking to overturn a decision to cancel the grounded South African budget carrier’s operating licence.
In a recent progress report, Mango’s business rescue practitioner (BRP), Sipho Sono, reveals that he will lodge an appeal against the International Air Services Council’s (IASC) decision to cancel the airline’s licence. Sono wrote to the IASC on 9 February seeking an explanation for its decision to cancel Mango’s licence, but says he has yet to receive a response.
“The BRP has therefore taken a decision to lodge an appeal against the decision of the IASC, and instructed his attorneys to commence those proceedings,” says Sono.
Mango’s operating licence is currently suspended because the carrier, which was placed into formal financial restructuring in the summer of 2021, has not flown for over a year.
Last month, Mango’s BRP launched a legal bid to secure a decision from the South African public enterprises minister to unblock a potential rescue deal for the airline. The administrator expressed frustration that the government had not reached a decision on South African Airways’ decision to sell its shares in Mango – a key part of the process for a prospective bidder to potentially rescue the carrier.
In its latest progress report, the BRP says the minister of public enterprises, the national treasury and the minister of finance filed notices opposing the High Court application, which had been due to be heard on 28 February.
“Due to the very late filing of the state respondents’ answering papers (on 27 and 28 February, respectively), as well as an intervening application brought by NUMSA [union] to join the BRP and Mango as a co-applicant, the parties requested the urgent court judge to stand the matter down in order to consult with the deputy judge president to agree on the further conduct of the matter,” says the administrator. The matter has now been stood down until late May.
South African Airways had earlier argued that the government is right to take its time on deciding whether to approve the sale of Mango, claiming that the airline’s administrator had not provided enough details about the proposed investor.
“Mr Sono has announced preferred investors a number of times before but failed to furnish details,” SAA said in a statement last month. “He would refuse to disclose to SAA and DPE [Department of Public Enterprises] the names of these preferred bidders, even though Mango shares are SAA’s property and we are within our rights to know the identity of the bidders.”
SAA adds that when the identity of the bidder was disclosed, it “pointed out a reasonable material conflict”. This dispute, adds SAA, “erupted around the nature of the due diligence required on the now-restructured prospective investor and their business plan”.
Sono says that if the proposed rescue transaction fails, he will initiate a wind-down process for Mango. He adds that he believes there is a “reasonable prospect” of rescuing Mango, and that this outcome would be better for creditors and shareholders than liquidation. SAA says it has “nothing to benefit from a liquidated Mango”.