Mango in business rescue.

[trees]

On the topic of Mango's future.

So, it seems that somehow, there is still a prospect that Mango can be rescued, as the supposed sale to an unknown investor may go ahead. However, I do have some questions regarding the future of the airline.

1. Would it be better if Mango was fully privatized and operated similarly to FlySafair and LIFT, instead of being an SAA subsidiary? They'd still have refunded tickets and other expenses that they need to pay off, and this is probably going to come out of the taxpayer's pockets, but would they be able to, and then still restart operations as a normal low-cost airline, free from government influence?

2. What would a new "Mango v2" look like? Being a fully-private low-cost airline, they'd have to start from scratch - get slots at airports, get aircraft (there are quite a lot of used 737s on the market post-COVID), raise capital, do everything needed to start a low-cost airline, but then how would that look? I'm assuming the airline will be quite slimmed-down, similarly to SAA, while the airline focuses more on growth and profits rather than image.

3. What would the effect of a new Mango have on the domestic market? I'm guessing the effect would be positive, as ticket prices go down and more capacity on trunkline routes such as JNB-CPT and JNB-DUR are filled, but then would this have any further, knock-on effects down the road, especially regarding other airlines?

4. Is there a chance that Mango will come back at all, or are we better off getting the entirety of Avcom to donate funds and raise 1time from the dead?

I'm not too confident on my knowledge of the whole Mango debacle, so pardon if my questions may seem short-sighted or random.

I think if mango are to return in whatever form it will have to be a completely new airline. There is literally nothing left of the original. No aircraft, no staff, no facilities. The offices where their HQ was at ORT already have new tenant's. It would require a massive capital outlay to basically start a brand new airline from scratch while potentially still incurring legacy debt? It doesn’t make sense to me.

I don’t believe there is any space left in the domestic airline market at the moment. If they were to start up now, I doubt they would last very long, not without a very generous shareholder with unlimited funds to support them.

[snoopy]

Maybe Sipho can explain how he comes to his conclusions. But at some stage there isnt going to be enough money left to pay his invoice as BRP, so...

The waterfall falls in the BRPs favour in any event...they get paid first from anything that is still payable.

[Burner]

https://www.citizen.co.za/business/man ... gordhan/

Mango sale to forge head despite Gordhan’s efforts
Business rescue practitioner confirms Ubuntu Air Services is set to buy Mango.
The business rescue practitioner of defunct low-cost airline Mango confirmed on Friday morning that Ubuntu Air Services is the company that wants to buy it. Sipho Sono confirmed to The Citizen that the company named in court papers was the preferred bidder.


Ubuntu Air Services is a partnership between one of South Africa’s largest tour operators, Africa Stay, and DG Capital. Trade publication CH-Aviation speculated about the identity of the preferred bidder last year, but until now events have been overshadowed by Gordhan’s consistent efforts to scupper any kind of deal.

Gordhan blocked sale of Mango
Gordhan blocked the sale of Mango last year citing that he had not received enough information to sign off on the deal. Sono took him to court and won. That effectively forced the minister to sign off on the deal within 30 days of its submission to his office or forfeit his influence.

Gordhan appealed the matter, failed in the High Court, and went to the Supreme Court of Appeal. “Public Enterprises Minister (Gordhan) was left with two options. On the one hand, the minister was entitled to file a petition to the Supreme Court of Appeal within one month from 13 December 2023, which would have automatically suspended the operation and execution of the principal judgment,” Sono’s update read.

Mango sale to go ahead
Gordhan failed to deliver his petition on deadline. “The business rescue practitioner sought legal advice and was informed that where a petition has been belatedly filed the principal judgment’s order continues to remain operational as a condonation application does not suspend the operation and execution of any order. This then means that the principal judgment is not suspended and remains executable notwithstanding the existence of the belated petition.”


Sono has a free hand to dispose of Mango, for now. The Supreme Court of Appeal is Gordhan’s last chance to stop the Mango deal. The business rescue update warned: “In the event that the transaction or investor process … fails for whatever reason, the business rescue practitioner will implement the wind-down process that is already incorporated in the adopted business rescue plan.”

Mango went into business rescue in mid-2021 with the company blaming various external factors, including the Covid pandemic, for its demise. Since then, the disposal of Mango became a hot potato with speculation alleging that Gordhan intended to sink the airline permanently because of its potential threat to Lift, related to two former Takatso consortium members.

Lift’s founder Gidon Novick is no longer part of the consortium, but industry professionals now say that a revitalised Mango could further challenge any kind of SAA recovery. The flag carrier is already back on a losing streak despite upbeat spin from its principals.

[Airplaneguy9]

Well, it looks like Mango might still have some kick left in her. Now I wonder how, if they do, will restart services?

[snoopy]

Interesting that SAA, (Mango's owner) started pitching into the 737 routes and market again with a overseas partner (Turks and German) - while Mango was in BR.

What is really left of Mango to buy? That Sipho deems sellable?

[Burner]

https://www.citizen.co.za/business/gord ... -sale-brp/

Article mentions that the BRP reckons Mango has substantial residual value, based on...

This lies in:

The Mango brand;


A customer base that is likely to return when it takes to the sky again;


A considerable number of passengers who will return to redeem vouchers for flights they booked when the airline was still flying and may lay the ground for the future customer base;


Its domestic licence, which will enable a newcomer in the domestic airline market to skip the queue of new applicants and thereby expedite its market entrance;

and
Mango’s proven IT and other systems.

[Deanw]

Those sound more like hindrances!

So, if pax return with in order to redeem vouchers, the "new" Mango will have to fly them without the benefit of receiving the income from those tickets, ie, fly them for free and incur substantial losses by flying planes full of non-paying pax?

[Kootenayflyer]

Those sound more like hindrances!

So, if pax return with in order to redeem vouchers, the "new" Mango will have to fly them without the benefit of receiving the income from those tickets, ie, fly them for free and incur substantial losses by flying planes full of non-paying pax?

Off course, even flying for free is an "asset" as you can claim Government payouts .....

L.

[snoopy]

Those sound more like hindrances!

So, if pax return with in order to redeem vouchers, the "new" Mango will have to fly them without the benefit of receiving the income from those tickets, ie, fly them for free and incur substantial losses by flying planes full of non-paying pax?

I remember the BRP telling all that the voucher money (Un-flown Ticket Liability of Mango SOC Ltd = R183 million) was held in reserve on numerous occasions in statements, for the ZAR value on the ticket voucher issued by the same company now being sold. Basically its an IOU in favour of the person who paid the airline ticket.

So that is probably part of the sales deal in ZAR value the buyer is buying. If that cash paid by Mango airline clients still exists and the BRP or SAA's owner, didnt spend it.

Mango Airlines SOC Ltd, (the company for sale and its owner, present and future) is still a debtor on my books.

Mango Airlines
1 October 2021 ·
CUSTOMER TICKETING UPDATE,
Mango Airlines remains under business rescue until further notice.
All unflown tickets and their values, whether booked directly or via an agent/third party, will be retained and vouchers will be issued to be used in future when the airline is operational or treated as a claim in the business rescue process.
During this period, customers are encouraged to make alternative flying arrangements till further notice.
Our call centres continue to remain unavailable for now.
Any further communication will be communicated to customers via our website and social media as it becomes available.
We apologise for the inconvenience caused.
We thank you for your patience and commitment to the Mango brand.
Mango Airlines SOC Ltd BR Practitioner,
Mr. Sipho Sono

There is no liquidation waterfall if the company is sold..the R183 Million value (in cash) should transfer to the new owner. It should still be in the company account of Mango SOC Ltd (a company that wasn't liquidated) - as unflown tickets. But paid for.

[snoopy]

14 March 2024 - Legal Notice Supreme Court of Appeal Bloemfontein.

https://flymango.africa/wp/wp-content/u ... -Order.pdf

The BRP accepted the offer from Ubuntu Air Services back on 26 August 2022, but for months was locked in legal battles with now retiring Gordhan (DPE), who kept on putting a spanner in the works to delay the sale of the company, essentially preventing its re-entry into the domestic airline industry. While at the same time using more tax payer money - again - to bailout SAA version 2 in order to push its expansion.

South African Airways was given a R10. 5 billion bailout in 2020, and a further R1 billion in 2023. In the Q3 report, SAA reported a net loss of R761 million, against the budgeted profit of R92 million for the period under review.

Full report here https://press-admin.voteda.org/wp-conte ... 202433.pdf

Note from the report that from the SAA Group -> only Air Chefs and Mango SOC Ltd were profitable. Mango being the profitable company the DPE was so eager to ditch. And Mango one of only two profitable companies in the group, was put into business rescue. While SAA (not profitable) was revived at the cost of the SA tax payer and Mango SOC Ltd customers (R183 million) and other creditors Mango SOC Ltd owner (SAA/DPE/SA Government ) still owes money.

According to the BRP the sale is now going ahead.
https://www.ch-aviation.com/news/138186 ... ial-ruling

[Volo]

Mango has not a "Snowballs hope in Hell" of coming back from that muddle - Lets see if I'm wrong ?

[snoopy]

Still would like to know what actually is for sale after it was gutted.

[marius scheepers]

Still would like to know what actually is for sale after it was gutted.

Their impeccable brand name "Mango", just exudes confidence and reliability and on-time performance!

[Richard Smit]

[/quote] Their impeccable brand name "Mango", just exudes confidence and reliability and on-time performance!
[/quote]

I have no specific desire to see Mango, or any other SOE emerge from the sewer that they find themselves in, but when Mango was operating, I found them to be the most comfy, and pleasant of the domestic (LCC) operators on the GRJ-JNB route. I used them at least twice per week for a number of years.

Their moulded, non-reclining seat design was the best (by far) and if I'm not fooling myself, they had one less row of seats in than Kulula and FlySafair.

Their crew/staff were well trained, and their product was simple, clean and efficient.

It was a strong brand.

[34south]

I agree 100% Rich! Unless you catch an Airlink seat at a reasonable price, we are compelled to use Safair out of GRJ these days. I’ve flown on them enough to confirm that the corporate vibe there is not a happy one, kinda like Kulula before they stopped operating. Could be that I keep catching the crew on their 4th sector each time & that the smiles are long spent for the day?

My recollection of Mango flights was that of a far happier vibe. Maybe another 180 seat operator would also prevent the blood money I paid GRJ-JNB-GRJ a couple weeks ago. The present monopoly leaves a sour taste in the mouth & burning sensation in the wallet.