SA Express losing R1 million of taxpayer money every day

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FoxTROT
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SA Express losing R1 million of taxpayer money every day

Unread post by FoxTROT » Sun Oct 28, 2018 9:52 am

https://mybroadband.co.za/news/governme ... y-day.html
SA Express losing R1 million of taxpayer money every day

Jamie McKane 28 October 2018

SA Express is losing more than R1 million every day due to aircraft sitting idle in hangars, the City Press reports.

Sources close to SA Express management told the City Press that the company has paid R150 million to lease 21 aircraft in the past five months since the state-owned airline was grounded.

SA Express aircraft were grounded after being classified as too unsafe to fly, but the company still pays to lease the aircraft despite their inactive status.

Sources said that the airline paid an estimated R40 million for “scrap aircraft” sitting in hangars between August and the end of October.


“Since they were grounded, they have been paying for aircraft that they are not able to fly,” sources told the City Press.

“It is like taking R40 million worth of taxpayers’ money and pouring it into a black hole.”

The state-owned airline cannot fly these aircraft as they are not airworthy, and they cannot fix them due to a lack of money.

Failure of SOEs

Finance minister Tito Mboweni announced a R1.2-billion bailout for SA Express this week, in addition to a R5-billion bailout for South African Airways.

A managing director of another local airline told the City Press that this bailout would not be enough to save SA Express.

“The R1.2 billion will help address historic debt, but it is not enough to take the business forward,” he said.

“The prospect of that business returning to profitability is not that good, and there is no strategic reason why they should not shut it down.”

SAA and SA Express are not the only state-owned enterprises which have failed dismally to reach profitability, with many losing money at an alarming rate.

The government is attempting to resolve the issues within these companies, but it is hampered by the loss of skilled employees and systemic corruption.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Joker11 » Sun Oct 28, 2018 10:36 am

In other news. Water... Wet.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by HJK 414 » Sun Oct 28, 2018 1:30 pm

“The R1.2 billion will help address historic debt, but it is not enough to take the business forward,” he said.

“The prospect of that business returning to profitability is not that good, and there is no strategic reason why they should not shut it down.”

SAA and SA Express are not the only state-owned enterprises which have failed dismally to reach profitability, with many losing money at an alarming rate.

The government is attempting to resolve the issues within these companies, but it is hampered by the loss of skilled employees and systemic corruption.


It never ceases to amaze me ...... :?
One thousand 2 hundred Million !! (1.2 Billion) that is !!

1.2 Billion to resolve issues that are already behind the airline (historic debt) - yet no concrete vision / management / sales or business perspective going forward. A never ending stream of taxpayers money going into a black hole with no accountability .....

The last paragraph probably sums it up best ......and as quality leaves before quantity - it will probably get worse - until someone grows a spine and closes it down or privatizes the lot.

African't at work ..... #-o

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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Only » Sun Oct 28, 2018 4:48 pm

Anybody know how many of their aircraft are flying?
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Ray W » Sun Oct 28, 2018 5:08 pm

SA Express aircraft were grounded after being classified as too unsafe to fly, but the company still pays to lease the aircraft despite their inactive status.
If I was the owner of those aircraft I'd also insist that the lease fees be paid whether the aircraft are flyable or not - not the lessor's problem if SAX didn't maintain the aircraft properly
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Bearcat » Sun Oct 28, 2018 6:00 pm

We dont have to worry... according to the PR Dept
https://ewn.co.za/2018/10/28/sa-express ... ainability
Last edited by Bearcat on Mon Oct 29, 2018 3:43 am, edited 1 time in total.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by evanb » Sun Oct 28, 2018 8:02 pm

Ray W wrote:
Sun Oct 28, 2018 5:08 pm
If I was the owner of those aircraft I'd also insist that the lease fees be paid whether the aircraft are flyable or not - not the lessor's problem if SAX didn't maintain the aircraft properly
I think the point the article is making is that they are paying for them, even though they're not flying.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Ray W » Mon Oct 29, 2018 8:54 am

Bearcat wrote:
Sun Oct 28, 2018 6:00 pm
We dont have to worry... according to the PR Dept
https://ewn.co.za/2018/10/28/sa-express ... ainability
Words and more words - lets see what the future brings
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Christo » Thu Dec 06, 2018 7:15 am

SA Express: Experts say it is ‘dead in the water’ but new chair insists airline will be profitable in 18 months

https://city-press.news24.com/Business/ ... s-20181206
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Jfairwell » Thu Dec 06, 2018 7:56 am

R1 million a day is a massive understatement. The SAX acting CFO noted in Parliament last week that SAX is losing R117 million a month since re-entry in August.

At the same meeting Mzimela indicated that SAX will focus on JNB as its hub, now Ramano talks about CPT - much confused? Both ladies have deplorable track records, which will be underscored by this misadventure at SAX at taxpayers’ expense. The board and Gordhan should be held criminally liable for what’s happening here.

Don’t forget about the lily livered banks, but that is a topic for another day.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by twr1 » Thu Dec 06, 2018 8:41 am

I see they have stated flying to Durban again but no base in Durban, seems the route is jhb DUR PE DUR jhb
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by jetstream31 » Thu Dec 06, 2018 11:38 am

State-owned domestic and regional airline SA Express will introduce a new route between Johannesburg, in Gauteng, and Mthatha, in the Eastern Cape, from December 10.

The airline will initially operate a daily flight from OR Tambo International Airport with the intention of increasing frequency early in 2019, subject to demand.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Ray W » Sun Dec 09, 2018 10:42 am

jetstream31 wrote:
Thu Dec 06, 2018 11:38 am
State-owned domestic and regional airline SA Express will introduce a new route between Johannesburg, in Gauteng, and Mthatha, in the Eastern Cape, from December 10.

The airline will initially operate a daily flight from OR Tambo International Airport with the intention of increasing frequency early in 2019, subject to demand.
I doubt this will work, other airlines have tried it and stopped flying the route. Perhaps having Govt money behind them will help
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by Only » Sun Dec 09, 2018 12:10 pm

Ray W wrote:
Sun Dec 09, 2018 10:42 am
jetstream31 wrote:
Thu Dec 06, 2018 11:38 am
State-owned domestic and regional airline SA Express will introduce a new route between Johannesburg, in Gauteng, and Mthatha, in the Eastern Cape, from December 10.

The airline will initially operate a daily flight from OR Tambo International Airport with the intention of increasing frequency early in 2019, subject to demand.
I doubt this will work, other airlines have tried it and stopped flying the route. Perhaps having Govt money behind them will help
This for me is the purpose of a state owned airline to operate to a place where it is not financial viable for a private airline to do so. The idea is that the greater community of Mthatha gains from it because it makes the town more accessible for tourist or businesses. The state airline should subsidize the loss with the profit made from fair competing on money making routes and if there is still a loss then government can bail them out.
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Re: SA Express losing R1 million of taxpayer money every day

Unread post by 1900driver » Sun Dec 09, 2018 1:32 pm

Money making routes for State Airlines.... :lol:

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