Government rejects Skywise's appeal for help

Cape Town - The Air Services Licensing Council will meet on December 9 in order to determine whether low-cost airline Skywise can resume flights again on December 10 as requested or not, according to Minister of Transport Dipuo Peters.

The possibility to resume flights would also depend on whether Airports Company SA (Acsa), which suspended the airline's flights on December 2, agree to uplift the suspension. This was after Skywise missed one instalment and its request for an extension of 48 hours was denied.

Peters informed Skywise that its suspension relates to a contractual matter and the plea should be made directly to Acsa and the relevant state owned enterprises (SOEs).

"Skywise must appreciate that setting such a precedence could be detrimental, with huge macro-economic effects to the organisation," according to Peters.

The department, therefore, referred the matter back to Acsa for consideration and a final decision.

Although the Department of Transport has oversight of the relationship between Acsa and airline operators, it cannot - in terms of its shareholder compact with Acsa - interfere with the contractual relationship that governs Skywise's specific contractual agreements, according to Peters.

"The business relationships between Acsa and all airlines operating at its airports are regulated in terms of agreements. This will include terms of payment and penalties in case of default," Peters responded to Skywise.

According to Peters, Acsa has indicated that it has done everything possible to assist "and has provided Skywise with a fair and equitable treatment as a service provider".

Peters wished Skywise all the best in resolving the matter.

Skywise appeals to Peters

Skywise claimed a lack of customer confidence or trust developed in the SA airline industry due to other airlines having failed in the past as well as due to "reputational damage caused by previous attempts" to ground it by Acsa - due to non-payment or delayed payment. This resulted in a cash flow crisis for the airline.

Qadir appealed to Peters to assist Skywise in its current situation by considering that it is a new low-cost airline "with a mission to offer low airfares with the best value". The airline is 100% privately owned and commenced flying between Johannesburg and Cape Town in March 2015 and employs more than 200 people.

According to Qadir, December through January are generally the busiest periods in the airline industry and a great opportunity for airlines like Skywise to make up for losses in previous months. She also said this would give South Africans the opportunity "to experience their holiday travels with another exciting and efficient alternative to the conventional modes of travel".

"Skywise believes that with the assistance of the Department of Transport in restoring partial consumer confidence and at the same time add value to the growth of the aviation sector by supporting female owned entrepreneurial initiatives in SA," said Qadir.

Skywise has also requested the department to support it in repairing the reputational damage it has suffered due to the suspension of its flights. Peters, however, made it clear any specific communication strategy regarding the brand of Skywise would need to be handled by the company directly.

Skywise also asked the department whether South African Airways (SAA) could be asked to accommodate all Skywise passengers scheduled to travel since December 2 until December 10.

The minister responded that it is the airline's responsibility to accommodate its affected passengers. The department did, however, appeal to SAA to assist where possible with the understanding that payment arrangements will be made accordingly.

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