SA Express needs a "miracle" if it is going to ever take to the skies again, according to the Acting Director General of the Department of Public Enterprises, Kgathatso Tlhakudi.
The department and Treasury officials on Wednesday night briefed Parliament's standing committee on appropriations on the financial challenges facing three struggling state-owned enterprises - SA Express, SAA and Eskom.
SA Express was placed under provisional liquidation in late April after a failed business rescue attempt. Affected parties have until June 9 to contest to the provisional liquidation before a final order of liquidation is made. All of the airline's assets will have to be sold to pay outstanding debt if it goes into final liquidation.
"It is safe to say 9 June may just be the D-Day unless some miracle materialises," Tlhakudi said.
While SA Express and SAA are both state-owned airlines, they are distinct businesses. SAA was placed into voluntary business rescue in early December.
'An absolute travesty'
SA Express was unable to pay staff salaries in May, and has suspended the contracts of its employees in terms of the Insolvency Act. It had also been unable to pay March and April salaries.
With assistance from the department of public enterprises, it did receive R5.7 million from the Unemployment Insurance Fund Covid-19 TERS scheme to pay employees. "There weren't funds to pay the salaries at all," said Daniel Terblanche, one of SA Express's business rescue practitioners, who was also attending the meeting.
The business rescue practitioners received no post-commencement funding throughout the process, Terblanche explained. "The lack of funding ultimately caused the non-payment of salaries. It was an absolute travesty."
The state previously had provided R1.2 billion in urgent financial support to the airline for the 2019/20 financial year, including R300 million released in October 2019.
The airline has incurred losses every year since the 2011 financial year, with the exception of 2016. Before Covid-19 struck it had already been battling with liquidity issues due to its high cost structures and contracts for the procurement of critical services, among other things. It also had its operator certificate suspended twice – in 2016 and 2018.