Is it the end of the runway for Mango Airlines?

The Air Services Licensing Council has suspended licences that give Mango the right to fly, because the state-owned airline has been grounded for more than 12 months. Without licences, investors that have lined up to rescue Mango might walk away, hastening its demise.
The ongoing attempted rescue of Mango Airlines is on shaky ground as its valuable assets, which would help the state-owned airline to receive much-need capital from investors, have been taken away.
The Air Services Licensing Council (ASLC), which is part of the Department of Transport and is responsible for awarding or revoking traffic rights to airlines, has suspended two air services licences belonging to Mango because the airline hasn’t flown in over 12 months. The suspension is for two years.
Mango hasn’t flown since the end of July 2021 because it submitted itself to business rescue proceedings, which are aimed at rehabilitating the airline’s financial situation which worsened due to Covid lockdowns that floored South Africa’s aviation industry.
The Air Services Licencing Act, which governs the country’s aviation licensing regime, requires that flight operations of airlines not be interrupted or grounded for more than 12 months if they want to keep their licences.
Mango has exceeded the 12-month grace period and its business rescue practitioner, Sipho Sono, has to now hand over the airline’s licences to the ASLC.
Mango, a subsidiary of state-owned SAA, has to essentially relinquish its right to fly. Without air services licences, efforts to rescue Mango and revive its flight operations will be futile.
The process to find investors jeopardised
Mango’s rescue plan is premised on finding strategic equity partners or investors who would buy the airline from the government and recapitalise it.
The Department of Public Enterprises – the custodian of state-owned entities (including airlines) – wants Mango to be hived off from SAA’s operations and completely sold to private sector players. Sono has already identified a preferred group of investors interested in buying Mango. The investors, who are part of a consortium, haven’t been named.
The investors had already signed an agreement with Sono to buy shares in Mango and the final step was for the group to assemble funding for the purchase by 10 August 2022. But this deal hangs in the balance now that Mango’s right to fly has been taken away.
Investors would typically want Mango to have valid air services licences so that the airline can restart its operations, work to regain its market share in the domestic ...