FlySafair said Mango’s fleet and operating model was a fit with its business model
Low-cost carrier FlySafair on Thursday reiterated its
willingness to consider acquiring SAA’s low-cost subsidiary Mango, which
earlier this week posted a net loss of almost R37m.
The loss in the year to end-March marked a dramatic reversal from a profit of R38m that Mango posted in the previous year.
Mango’s financial results — which are normally consolidated and hidden in its parent company’s statements — were released for the first time to Parliament’s finance committee after persistent pressure by the DA.
BY Karl Gernetzky/BDlive
The loss in the year to end-March marked a dramatic reversal from a profit of R38m that Mango posted in the previous year.
Mango’s financial results — which are normally consolidated and hidden in its parent company’s statements — were released for the first time to Parliament’s finance committee after persistent pressure by the DA.
The loss came on revenue growth of R2.3bn from R2.2bn in
2014-15 and despite a 21% increase in passengers and 14% lower fuel
costs.
FlySafair said Mango’s fleet and operating model was a fit with its business model.
The carrier would buy Mango from the government at "the right price," said FlySafair, noting Mango’s financial loss despite that the airline leases aircraft from SAA at discounted rates.
"Mango’s fleet and operating model is closer to FlySafair’s low-cost approach, and would be a more natural extension to FlySafair’s successful business model," said FlySafair CEO Elmar Conradie said in a statement.
He added: "Operating a larger fleet would afford us the opportunity to enjoy even larger economies of scale – and through this, sustain lower fares to the flying public."
Mango, along with SA Express, are facing possible consolidation with SAA after Finance Minister Pravin Gordhan announced in February a need to review the need for multiple state owned airlines.
The Treasury has subsequently been working with the Department of Public Enterprises on several options, including the question of a merger or the creation of a holding company. The move could see the introduction of a strategic equity partner.
Head of sales and distribution at FlySafair said on Thursday the company had achieved low operating costs per seat, which could be extended to Mango along with economies of scale.
The sale of Mango would "take some financial burden off the government," he said.
FlySafair said Mango’s fleet and operating model was a fit with its business model.
The carrier would buy Mango from the government at "the right price," said FlySafair, noting Mango’s financial loss despite that the airline leases aircraft from SAA at discounted rates.
"Mango’s fleet and operating model is closer to FlySafair’s low-cost approach, and would be a more natural extension to FlySafair’s successful business model," said FlySafair CEO Elmar Conradie said in a statement.
He added: "Operating a larger fleet would afford us the opportunity to enjoy even larger economies of scale – and through this, sustain lower fares to the flying public."
Mango, along with SA Express, are facing possible consolidation with SAA after Finance Minister Pravin Gordhan announced in February a need to review the need for multiple state owned airlines.
The Treasury has subsequently been working with the Department of Public Enterprises on several options, including the question of a merger or the creation of a holding company. The move could see the introduction of a strategic equity partner.
Head of sales and distribution at FlySafair said on Thursday the company had achieved low operating costs per seat, which could be extended to Mango along with economies of scale.
The sale of Mango would "take some financial burden off the government," he said.
BY Karl Gernetzky/BDlive
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