Could SA Express staff have helped stop the looting that led to its downfall?

A SA Express jet on Cape Town International Airport's runway.
A SA Express jet on Cape Town International Airport's runway.
Gallo Images/Grant Duncan-Smith
  • SA Express was placed in provisional liquidation at the end of April this year after a failed business rescue attempt.
  • The Department of Public Enterprises has indicated it is working with the provisional liquidator to try and find a solution.
  • A group of SA Express employees have engaged an equity crowdfunding platform to try and save the airline through "alternative" funding.

Could the employees of SA Express have prevented the looting at the state-owned airline, which contributed to the predicament they now find themselves in?

Perhaps, say some - had they been better empowered to blow the whistle. 

"We as employees were only given a whistleblower platform in October 2019, after all the misconduct and corrupt deals were concluded, but still told not to say anything due to the fact investigations are ongoing and our agreement or contracts do not allow us to say anything," claimed a reliable source who prefers to remain anonymous due to the sensitivity of the matter, but whose identity is known to Fin24.

SA Express was placed in provisional liquidation at the end of April this year after its business rescue practitioners filed an urgent court application in this regard. The application to place the airline in business rescue was brought by Ziegler SA, a service provider to the airline.

The state provided it with more than R1.2 billion in urgent financial support for the 2019/20 financial year, including R300 million released last October.

The Department of Public Enterprises has acknowledged in the past the financial pressures at SA Express resulted from years of mismanagement and state capture.

In March, SA Express, like other airlines, had to suspend operations due to travel bans imposed for the national lockdown. The last time employees received salaries was in February this year.

In an attempt to try and obtain government help to at least get their salaries owed as well as severance packages, a group of SA Express employees have picketed at the department's offices in Pretoria on-and-off. They have also engaged with it.

The department said it was working with the provisional liquidator to try and find a solution.

In a recent internal email, seen by Fin24, acting director-general Kgathatso Tlhakudi said "the activism that has been displayed on this matter would have helped when the business was getting looted by the management of SA Express, whose shenanigans where exposed at the Zondo commission, and the employees should have been aware of. The department has called on the criminal justice system to act on these former leaders".

Some employees dispute this.

"We were told and threatened numerous times by CEOs and top management about what would happen if we do or say anything or questions their decisions," one told Fin24, on condition of remaining anonymous.

In a correspondence dated 25 June 2016, which Fin24 has seen, employees were warned "the media is currently doing an expose on the previously communicated suspension of an executive".

Employees were cautioned "to refrain from making comments, internally or externally, on this matter and to be mindful of the confidentiality agreement each member of staff has signed".

Correspondence to employees, dated 7 July 2017 which Fin24 has seen, also cautioned them not to talk to the media.

In September 2017 and in March 2018, when a number of executives at the airline were suspended pending an investigation into allegations of misconduct, employees were again told in a written notices "to refrain from making comments, internally or externally on this matter, and to be mindful of the confidentiality agreement each employee has signed".

"SA Express continues to be under the stewardship of the executive management team and board of directors who will continue to lead the organisation in an efficient and effective manner [t]hroughout this transitional period," employees were instructed.

They were implored "to play their part in ensuring that SA Express continues to conduct its operations as normal, without undue disruption".

According to the source, none of the executives mentioned in any of the prior correspondence to employees have been brought to book or taken to task about their decisions that have contributed to the financial downfall of SA Express.

"SA Express is the only airline with an active pilot cadet programme. If you look at what SA Express has done for transformation in aviation, no other airline has achieved as much. We have 30 to 40 previously disadvantaged pilots of which a few could be upgraded to captain if the airline expanded as planned," said the source.

"How many other people, like ground engineers, has SA Express not uplifted and trained to move on to other aviation or corporate positions in the SA economy?"

The source felt the government had now turned its back on the SA Express employees.

About two weeks ago, employees received notices, stating "certificate of service, reason for termination: liquidation".

According to the source, last year in September there were voluntary severance packages offered to employees, but "only a certain group" were allowed to apply.

"Others were told that, with the restructuring of the airline, their applications would not be considered for voluntary severance packages, because the airline is going to grow. Now, a year later, we get nothing, not even outstanding salaries owed from March and April for which we worked," said the source.

Equity crowd funding

On Monday, a group of SA Express employees issued a statement to say they have engaged an equity crowd funding platform, Uprise.Africa, in an attempt to try and save the airline through "alternative" funding.

The CEO of Uprise.Africa is Tabassum Qadir, former co-chairperson of Skywise Airlines, which has been grounded since the end of December 2015.

An expression of interest was, therefore, submitted to the provisional liquidator. The proposal would need to be approved by the liquidators, shareholders and relevant authorities.

"Liquidating SAX translates into slicing through the very artery that feeds the minor towns and cities in SA, and closing the gateway to our more rural areas," said Michael Hlatshwayo, a spokesperson for the group of employees. "The airline's internal financial troubles stem from political interference in its operations, nepotism, poor controls and poor management, exacerbated by external challenges - we can change this. "SAX's fundamental business models are sound with small, cost-efficient aircraft, under-serviced destinations and exclusive, high-value routes. The execution of a revised business model and right-sized operation, by competent management, free of political interference, will return the airline to profitability."

The provisional liquidator has declined to comment. 

* The Department of Public Enterprises has been approached for comment, but at the time of publication none has been received. Should any response be received, this article will be updated.

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