South African Express (SA Express) has been placed under bankruptcy protection, having lost an appeal on February 13 against a Gauteng High Court judgement that put the regional carrier into a business rescue one week ago.

Global logistics company Ziegler had brought the application in January, which claims it is owed ZAR11.3 million (USD770,000), as it believes the airline is technically insolvent and unable to pay its debts.

Losing its appeal confirms that the state-owned carrier is now under business rescue, in which a restructuring expert takes over the management of the company. But all operations continue, as usual, it said in a statement issued on February 13.

“While the manner in which the introduction of the business rescue process occurred is unfortunate, this now provides the environment to facilitate the conclusion of initiatives that had already been initiated by the board and executive team,” SA Express said in the statement. “The business rescue process is well-coordinated, with no disruptions to customers and employees.”

Focussed on domestic and regional destinations, the airline is a separate business from the far larger state carrier South African Airways, which entered its own business rescue in December.