Another airline failure – another corrupt board

SA Express was grounded this week and the story is starting to emerge. This is probably only the tip of the iceberg. How is it possible that things can go so far without someone smelling a rat?

Mr Gordhan needs to act immediately and decisively. Full lifestyle audits on every executive must be done immediately. The culprits must be identified and prosecuted to the full extent of the law.

The board of SAA needs to consist of professional business executives that know what the term ‘corporate governance’ means. Mr Gordhan, you need to take action and fix this wholesale raping of our economy. The buck stops with you. 

The CEO of EML energy, Eric Motlhake has a lot to answer for. 

 A virtually unknown music promoter was given a three-year tender to supply SA Express with fuel worth R2.4 billion – but failed to deliver a single drop.

This is despite a deal already being in place to receive fuel from South African Airways, reports the Sunday Times.

The deal was said to be orchestrated by two SA Express executives without following any tender process or the knowledge of the airline’s board and management.

SA Express confirmed that its current fuel supply deal with SAA came at an average cost of R45 million a month, thus the dodgy EML Energy deal meant the already troubled airline paid roughly R800 million more than SAA over the three years.

The contract is now the subject of an investigation.

Merger and grounding

On Thursday (24 May), Public Enterprises minister Pravin Gordhan announced that South African Airways (SAA), SA Express and Mango are to be merged.

Speaking on the restructuring, he said that all three airlines currently fly to the same destinations, and that bringing the airlines together and rationalising their routes and important.

However, SA Express also received some particularly troubling news from the South African Civil Aviation Authority (SACAA) on the same day, when it announced that it had suspended SA Express’ Air Operator’s Certificate (AoC) as well as the airline’s Aircraft Maintenance Organisation (AMO) approvals.

In addition, the SACAA has also suspended the Certificates of Airworthiness of nine of the 21 aircraft being operated by the airline.

“This effectively means that SA Express can no longer continue to operate as an airline,” the SACAA said in a statement.

To be able to operate, SA Express will have to reapply and be issued with relevant approvals, an air operating certificate, and an approval for the aircraft maintenance organisation, and certificates of airworthiness for the grounded aircraft.

The decision to revoke the airline’s permits comes after the SACAA conducted an audit at the airline and its maintenance organisation in the past several days, which uncovered severe cases of non-compliance that pose serious safety risks.

You can read the full story in today’s Sunday Times.

Marthinus Strydom

Marthinus is a venture capitalist and private equity investor.

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