South African Express (XZ, Johannesburg O.R. Tambo) is expected to receive another multimillion-rand bailout from the South African government, its third such tranche of financial support since February 2019, online newspaper Daily Maverick said. The South African Airways (SAA) feeder carrier also plans to introduce private equity partners to help resolve its financial plight.

The regional airline is set to receive ZAR164 million (USD11.2 million) from its government owner during FY2020/21, in addition to the ZAR1.2 billion (USD82 million) it received in February 2019, which was then topped up in September last year with another ZAR300 million (USD20.5 million) hand out. Interim Chief Executive Officer (CEO) Siza Mzimela, who heads a newly-appointed management team at the airline, recently said that the three bailouts have been used to pay the airline's debt and to keep the airline flying.

According to court papers seen by the newspaper, the resources were being allocated by the government to "further address" the carrier's "financial challenges." Details are yet to be confirmed on whether the funds will come in the form of a capital injection or a government guarantee.

The court papers relate to a case being brought by a former service provider Ziegler SA, as it wants the airline to be placed under business rescue or to be liquidated as it cannot pay its debts, including the ZAR11.3 million (USD770,000) it is owed.

To help alleviate its financial pressures, SA Express hopes that unnamed private equity partners will inject capital into the carrier in exchange for shares. However, this is not the first time that this type of investment has been mooted. The South African government sought strategic equity partners when it proposed merging SA Express with SAA and its low-cost subsidiary Mango Airlines (JE, Johannesburg O.R. Tambo). The present plan to introduce equity partners will see that strategy combined with cutting unprofitable routes and reducing costs through likely staff reductions. Due to the ongoing court proceedings, the details on the potential private investors cannot be revealed.

The news of SA Express' latest financial lifeline comes at the same time as government-owned SAA is in the throes of its own business rescue. The flag carrier had recently been forced to cancel selected domestic flights and its Munich service between January 20 to 24 as the government scrambled to inject a further ZAR2 billion rand (USD137 million) into SAA.