South African airlines plan mega merger as flagship carrier suffers low passenger traffic from Nigeria over xenophobia

THE SOUTH AFRICAN GOV ERNMENT is considering merger of its South African Airways, low-cost carrier Mango and regional carrier, SA Express, as the country’s biggest carrier battle low passenger traffic from Nigeria, after xenophobic attacks on Nigerians in the South African country.

South African Airways, the nation’s international and domestic flag carrier, SA Express, a regional carrier that links remote towns and cities, as well as some international destinations and Mango Airlines, the countries low-cost-carrier are fully independent airlines but funded by the government. The new proposal, prepared by the Department of Public Enterprise, was presented to parliament on Wednesday September 11, according to Business Tech SA.

This is great news for South Africa Airways and SA Express, both of which have received government bailouts in recent months. SA Express ran out of cash in August and was forced to ground its entire fleet until the government provided an additional R300 million ($20.5 million).

Meanwhile, the strained relationship between Nigeria and South Africa over xenophobia has taken a toll on South African Airways.

Amid the drop in passenger traffic to the area, cash strapped SAA is on life support as the country’s government cash injection of 5.5 billion rand ($376 million) approved for the 2019/20 financial year is expected at the end of the month, but it still needs more money, the presentation to lawmakers showed on Wednesday.

South African Airways has a debt of about 12.7 billion rand, consisting of 9.2 billion rand of legacy debt and a 3.5 billion rand working capital facility provided by banks.

The Nigerian route is like life blood to SAA and has done everything to remain very competitive against Nigerian airlines.

A source at the Murtala Muhammed International Airport, Lagos, who is conversant with airlines’ processing of passengers and who pleaded anonymity, said that the surge in passenger traffic to the area from Lagos had seriously dwindled, adding that travellers are refusing to travel to Johannesburg, Pretoria or Durban; three major South African cities or use them as transit point because of fear for their security.

The airline, shortly before the Abuja Airport runway was repaired in April 2019, operated 14 weekly frequencies to Lagos and Abuja. But after the reconstruction, the carrier now flies into Lagos daily on a seven frequencies basis.