Public Enterprises speaks out on Comair claims

Wednesday, November 7, 2012

Pretoria - Public Enterprises Minister Malusi Gigaba has dismissed allegations that the Mango Airline was responsible for the demise of 1Time Airways.

This follows allegations by Comair group chief executive officer, Erik Venter, that the state-owned company, Mango, was the reason behind the downfall of the low-cost airline.

On Friday, 1Time announced that it had applied for liquidation and that all of its operations had been grounded with immediate effect.

"The allegations made by Mr Venter, CEO of Comair Ltd, including citing Mango as the cause of 1Time's demise, with over 1 000 employees as collateral damage, are serious in nature and designed to cause commercial harm to Mango as an entity, and by default the State, with an apparent expectation of impunity to recourse," said Gigaba on Tuesday.

Gigaba said his department was disheartened by 1Time's demise and the subsequent job losses it incurred.

The minister described the airline's exit as "regrettable", given the partnership between public and private entities to create jobs and economic growth.

"Mango remains, as from day one, an entity operating independently from its shareholder South African Airways; [it was] created to have the lowest cost base of any South African carrier and comparable to leading low cost operators globally.

"We appreciate Mr Venter's classification of Mango as an efficient airline that serves to lower the cost of ticket prices in the hands of the public being the exact mandate of the entity (sic).

"The systematic attempt, however, at disaggregation of competitively sensitive information such as cost composition, beyond what Comair is willing to disclose itself to its own shareholders, comes across as hypocritical and self-serving," said Gigaba.

Mango, the minister said, was in a cash-positive, neutral movement position and was viewed as a model of stability in a sector facing continuous economic challenges in a contracting market.

"Mango did not benefit from any capitalisation or guarantee issued in favour of its parent company, SAA. Mango has been substantially cash-positive since inception and no expectations exist that the entity would require any form of related shareholder assistance in the years to come," said Gigaba.