Johannesburg - Claims of late-night phone calls warning of commercial destruction and hints at political interference have added intrigue to this week’s grounding of low-cost airline Skywise.
Co-chairperson Javed Malik this week claimed his airline was being targeted by competitors who were determined to see one of the local industry’s newest entrants fail.
Skywise was barred from taking off from Cape Town or Johannesburg for several hours on Sunday, Monday and Tuesday because of debts owed to Airports Company SA (Acsa) and Air Traffic Navigation Services.
By Thursday, all flights between Cape Town and Johannesburg – the route the airline flies four times a day – were taking off on time.
Acsa charges airlines R152 per passenger to cover “landing, takeoff, parking of aircraft and related service charges”.
The airport company said on Tuesday it had been forced to suspend Skywise’s operations “after numerous efforts were made to recover outstanding debt from the airline”.
Air Traffic Navigation said on Thursday that it had negotiated new payment terms for Skywise to fund its debts racked up between September 30 and October 10. Spokesperson Percy Morokane said: “Days before the grounding, Skywise was reminded of its commitment.”
Air Traffic Navigation had been mindful of the fact that the deadline would fall over a weekend, the airline’s busiest period.
Morokane said hundreds of other airlines fly in the local airspace and they manage to comply with the terms and conditions stipulated by Air Traffic Navigation. He noted that Skywise remained a “valued client”.
The evident cash flow shortages come just three weeks after company president Tabassum Qadir – owner of 20% of Skywise’s holding company, Pak Africa – announced the firm was planning to buy and lease seven to eight Boeing 737-800s over the next three to four years. The airline was in “expansion mode”, she said.
But Malik said the airline, launched in March 2014, was being unfairly treated by Acsa, which had given management just six hours to meet a final deadline for when flights would be suspended.
He said the cash was paid, but would not reflect in Acsa’s bank account by the designated time. Malik described how he had resorted to begging an Acsa official not to ground the low-cost airline and – at 11pm on Saturday – even offered to hand over cash as a guarantee that the debts would be settled. He said he had told the Acsa employee that “trust [in Skywise] is going to be shattered”.
The man, who Malik wouldn’t name, rejected the offer and ended the call.
But the airports company denied emphatically that the deadline was sprung on Skywise. It said that on September 16 it signed an agreement on restructured payment terms for debt that dated back to August. Acsa said when Skywise failed to pay up, it was left with “no option” but to suspend.
Malik said he had been warned the airline’s demise was being systematically plotted by competitors. He said he had recently received a late-night call from someone “well known in the industry” who had told him “someone is going to take you on”.
Malik confirmed to City Press this meant there was a sinister plot to destroy the airline and remove it from the industry.
Malik said the story behind the public relations disaster was “bigger than the politics stories in this country”. As soon as the airline was “back [on its feet] again” the truth would be told: “A lot of the story we are not saying yet.”
However, in a series of cryptic tweets this week, co-CEO Irfan Pardesi indicated the airline’s problems were politically connected: “What do you do when the bully is the principal’s son?” he tweeted and added the hashtag #dobusinessnotpolitics.
In a Facebook post about the industry, he wrote: “What I didn’t know was this business is more politics and dirty tricks than the business of adding value.”
When asked what this referred to, Skywise spokesperson Martin Chemhere responded: “Skywise is not ready at the moment to make further comments about the politics issue.”
Erik Venter, CEO of Comair, which operates low-cost carrier Kulula and the local British Airways franchise, said this week he had “expected casualties” in the price war that had exploded in the airline industry.
Since last year, FlySafair, Skywise, Fly Blue Crane and Fastjet had all entered the local airspace. FlyAfrica is another hopeful.
The new airlines have sought to grab market share through increasingly low-fare offerings that many in the industry have said were unsustainable.
Two months ago, FlySafair gave away 30 000 tickets to Cape Town in a massive marketing drive.
Skywise countered with an offer that for R8 000 a month, a passenger could take as many flights between Cape Town and Johannesburg as they wanted.
Hein Kaiser, spokesperson for Mango, the low-cost subsidiary of SAA, said this week that any failure or hint of failure was negative for the industry and for passengers, who have “been bitten so many times”.
Pak Africa – the investment firm that owns Skywise – made headlines earlier this year when it came to light that its chairman is Yusuf Saloojee who, in 2012, was implicated in an explosive corruption scandal.
Saloojee, who was South Africa’s ambassador to Iran, was suspended from his post in 2012 after local cellular operator Turkcell accused MTN of bribing officials to score a $4.3bn (R56bn) licence deal, which gave it 49% of Irancell.
Saloojee got the equivalent of $200 000 allegedly as a bribe for helping MTN secure the deal. MTN later vindicated Saloojee, but an investigation by the department of international relations and cooperation has still not reached a conclusion.