Velvet Sky scrambling to fly again

2012-03-07 22:38
Cape Town - Embattled low-cost carrier Velvet Sky is exploring all avenues to be able to take to the skies again, the airline's chief told the KwaZulu-Natal High Court in Pietermaritzburg on Wednesday.

The airline's CEO Dhevan Pillay, told the court, where it faced two separate applications which could affect its future, that if capital was forthcoming from a possible new investor, Velvet Sky would be able to meet its daily expenses and operate profitably within reasonable time.

He said talks with two neighbouring African countries for additional routes had taken place, and one country had agreed to allow the company in.

This route would be dollar-based, and while the costs would be about the same as internal flights, the revenue would be higher.

Maintenance service provision would be switched, saving about R2m a month.

In-flight advertising, pay-to-eat and maximisation of cargo carrying capacity could bring in about R2.5m to R3m a month.

Velvet Sky is negotiating with a bank for passengers to buy tickets on credit over a year.

The reason for the airline's debt was that it started with a business model designed to operate three aircraft.

However, it was only able to start with one aircraft as the other two were being refurbished. This cut cashflow. Only one aircraft operated until October.

Pillay was responding to assertions by the CEO Umzano Transport Services in Durban, whose company it allegedly owes more than R3.9m.

Umzano's chief executive said there was no prospect of Velvet Sky being able to pay the nearly R100m it owed creditors.

The transport company had applied in the High Court for a business rescue operator to be appointed for the airline, a fairly new measure under the Companies Act. The other application was for a winding up order.

Both applications were postponed, with no postponement date yet decided on.
Read more on:    velvet sky  |  pietermaritzburg  |  air travel

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