South African Express (XZ, Johannesburg O.R. Tambo) has been told by the South African government that its ZAR300 million rand (USD20.5 million) recapitalisation has been approved. The funds, which are in addition to ZAR1.2 billion (USD82 million) received in the February budget, will be used for working capital and for creditors, the newspaper Business Day reported.

Interim CEO Siza Mzimela told members of parliament on September 11 that the struggling state-owned carrier had been “advised” that the recapitalisation would go ahead. The country's National Treasury later confirmed that the amount had been transferred via the Department of Public Enterprises.

“These funds were provided from a contingency reserve which was revised upwards to respond to possible requests for funding from state-owned enterprises as per the announcement made during the February 2019 budget speech,” the Treasury told Business Day.

Having depleted its working capital and unable to borrow from banks without a guarantee from the state, SA Express needs the cash to keep operating. Finance Minister Tito Mboweni has refused to give such a guarantee, the newspaper reported last month, believing SA Express should merge with the similarly state-run South African Airways (SA, Johannesburg O.R. Tambo) and then be privatised.

Mzimela said at a press conference that ZAR300 million would be “more than sufficient to ensure SA Express operates efficiently without running into problems again”.

Also on September 11, the Department of Public Enterprises told the parliament it had completed a study on the merger of state-owned South African Airways, SA Express, and Mango Airlines (JE, Johannesburg O.R. Tambo). The study found that that a merger would be beneficial in terms of consolidation and cost savings, BusinessTech reported.

In related news, on September 12, South African Airways' chief risk and compliance officer Vusi Pikoli told the parliament’s public enterprises committee that he had resuscitated corruption cases at the flag carrier, which had previously been reported to the Hawks - the Directorate for Priority Crime Investigation set up by the Zuma administration - but not acted on. He said that having worked on the issue for the last seven months he had discovered the extent and the impact of political corruption at the airline, the radio station Eyewitness News reported.