South African Express (EXY, Johannesburg O.R. Tambo) is hoping to resume flight operations by June 23, acting chief executive Matsietsi Mokholo has said.
The state-owned airline was grounded for 30 days on May 24 after the South African Civil Aviation Authority (SACAA) revoked its Air Operator's Certificate (AOC), airworthiness certificates for nine of its twenty-one aircraft, and its AMO accreditations. The regulator said it had based its findings on an audit of the carrier's operations the week before during which time it uncovered seventeen (17) findings, of which five (5) were categorised as Level 1, the most severe, while the remainder were Level 2.
In a statement issued via social media on Wednesday, May 30, Mokholo said a corrective course of action had already been drawn up with the aim of resuming flights within the timeframe prescribed by SACAA.
"We have premised our intended course of immediate and medium-term actions on the intention to recover flight operations, stabilise the airline and financial position and reform of the company, as soon as possible," she said. "The intent is to ensure that the airline addresses the findings of the SACAA within the prescribed 30 days, followed by the review and auditing by the SACAA of the Corrective Action Plans (CAPs)."
"We're giving ourselves 10 days to have all the CAPs in place, the next five days will involve robust interaction with SACAA so they can give us feedback on our plans which we can fix if need be. The next 15 days are 'How do we come back?' because we are going to come back."
On the airline's going-concern status, a key Level 1 issued raised by SACAA, Mokholo said government had been engaged as the shareholder and that it "appreciated" the fact that SA Express's return would require some form of recapitalization although the extent to which it would avail funds, and more importantly when, was not disclosed.
Mokholo said an investigation would be launched into the airline's history of poor financial and managerial accountability, especially in light of a recent investigative report by The Sunday Times which exposed a three-year, ZAR2.4 billion (USD190.3 million) contract with local music promoter, Eldrige Mothlake, for the supply of jet fuel. The deal was reportedly arranged by two of the airline's executives, Sam Vilakazi and Merriam Mochoele.
"One of the critical, immutable steps in the recovery process is for the airline to address allegations of financial mismanagement and non-adherence to appropriate governance practices and take appropriate action.
"Firstly, we will be cancelling and recovering costs for contracts that were entered into fraudulently. Additionally, where contracts concluded resulted in irregular expenditure, the airline has cancelled and re-advertised the tender to ensure compliance with the Public Finance Management Act, 1999 (PFMA), the Treasury Regulations and the company’s Supply Chain Management policy."
"In the case of fruitless and wasteful expenditure, the company has been investigating these expenditures to establish whether steps were taken to avoid such expenditure and, if not, consequent management will be applied."
