South African Airways (SA, Johannesburg O.R. Tambo) has recanted allegations it made late last week concerning the lease of ten B737-800s to its LCC sister company, Mango Airlines (MNO, Johannesburg O.R. Tambo), at below market rates.
In a statement announcing Mango CEO Nico Bezuidenhout's impending departure, the state-owned carrier took the unusual step of stating that it had launched an investigation into the leases but also the manner in which certain routes were reallocated from SAA to Mango. Both issues were said to have benefited Mango's operational and financial performances to the detriment of SAA's.
However, following Bezuidenhout's unconditional denial of SAA's claims on Tuesday, SAA then rescinded its original statement noting the following: "During March 2016, the SAA Board, with the assistance of external advisors, analysed these lease agreements with Mango and satisfied itself that all such agreements had been concluded on a full cost recovery basis. These aircraft were accordingly not leased at a discount."
The chaos affecting SAA's upper management is no secret. Sole shareholder, the South African government, has warned SAA that it would only consider disbursing additional funding once the airline has resolved its leadership problems. Last year, cash-strapped SAA asked the South African Treasury for a guarantee of at least ZAR4 billion (USD284 million) for it to finalize its 2014/15 financial statements as a going concern.
