Mango denies SAA provided cheap plane leases

(iStock)
(iStock)

Johannesburg - Mango Airlines leased planes from South African Airways SOC at market-related rates, its chief executive officer said, denying a statement by the budget carrier’s state-owned parent that it provided aircraft at a “substantially discounted cost.”

“It’s outright, straightforward, not true,” Nico Bezuidenhout, 39, said in an interview. Mango pays market-related lease rates and since 2010 has negotiated new deals directly with leasing companies, he said.

SAA said on June 11 it sub-leased Mango all 10 of its Boeing 737-800 aircraft at a discounted cost while paying the leasing company the market rate, an arrangement that would potentially have given the budget carrier an advantage in SA's highly competitive market. The move was a “necessary investment” to support the low-cost entity, SAA said.

The statement was part of a response to the resignation of Bezuidenhout, who will become the head of Africa-focused carrier FastJet from August 1.

“SAA must please substantiate any of these claims,” Bezuidenhout said.

SAA has been surviving on government debt guarantees and last posted a full-year profit in 2011.

Mango, which connects cities such as Johannesburg, Cape Town and Durban, was profitable in the year to March 2015 and made a loss in the most recent fiscal year, Bezuidenhout said.

The Democratic Alliance, the largest opposition party, will request that the Competition Commission start a probe into possible collusion between SAA and Mango, the DA said on Monday.

ZAR/USD
16.83
(-0.15)
ZAR/GBP
21.13
(+0.41)
ZAR/EUR
19.10
(-0.49)
ZAR/AUD
11.68
(-0.07)
ZAR/JPY
0.16
(+0.14)
Gold
1803.38
(+0.19)
Silver
19.07
(+1.62)
Platinum
829.66
(+0.86)
Brent Crude
43.02
(0.00)
Palladium
1965.00
(+0.71)
All Share
56199.46
(+1.41)
Top 40
51874.81
(+1.41)
Financial 15
10703.82
(+2.21)
Industrial 25
76910.63
(+1.02)
Resource 10
53327.86
(+1.61)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 2003 votes
I am taking a hit, but should be able to recover in the next year
23% - 2621 votes
My finances have been devastated
35% - 3925 votes
It's still too early to know what the full effect will be
25% - 2809 votes
Vote