SA Express placed under provisional liquidation

The high court in Johannesburg has placed ailing airline SA Express under provisional liquidation, in a sign that it is fast reaching the end of its life.

This means that those affected by the liquidation will still have the opportunity to give reasons the state-owned airline should not be liquidated before a final order is made by the court.

The high court heard the application brought by the business rescue practitioners, Phahlani Mkhombo and Daniel Terblanche, on Tuesday.

The practitioners lodged an application on March 25, asking that SA Express be placed into provisional liquidation and that the court order that the business rescue process be discontinued.

In an affidavit to the court on behalf of the business rescue practitioners, Terblanche said there was  “no reasonable prospect for SA Express to be rescued”.

Earlier in April, the business rescue practitioners said the government had not lodged papers opposing the application for liquidation.

This comes as the global aviation industry has been grounded due to the Covid-19 pandemic and previously successful operators face collapse and are seeking the national government’s aid.

Another state-owned airline, SAA, is also facing the possibility of liquidation despite the government’s insistence that it can salvage the situation and create a new, profitable airline.

SA Express is in business rescue after a creditor brought a successful court application in February.

Unlike SAA, which has been provided R5.5bn of post-commencement finance by the Treasury, SA Express has not received any assistance to finance the rescue process.

The airline employs nearly 700 people.

SA Express suspended operations in March. 

It was one of the first organisations to apply to the UIF Temporary Employee Relief Scheme (Ters) for assistance, under the expedited Covid-19 benefit.

The airline was unable to pay staff salaries in March and was reportedly only able to pay a portion of salaries in April. — BusinessLIVE