In the wake of on-going statements from the Comair Group pertaining to Mango SOC Ltd, I am compelled to set the record straight. The allegations made by Mr Venter, CEO of Comair Ltd, including citing Mango as the cause of 1Time’s demise with over 1000 employees as collateral damage, are serious in nature and designed to cause commercial harm to Mango as an entity, and by default the State, with an apparent expectation of impunity to recourse.
We are disheartened by the demise of 1Time and the subsequent job losses incurred. It is not only employees that are directly impacted but also their families along with up and downstream community economies. 1Time’s exit is regrettable given the partnership between public and private entities to create employment and economic growth. After all, aviation serves as one of the building blocks a successful and developing economy.
Mango remains, as from day one, an entity operating independently from its Shareholder (South African Airways) created to have the lowest cost base of any South African carrier and comparable to leading low cost operators globally. We appreciate Mr Venter's classification of Mango as an efficient airline that serves to lower the cost of ticket prices in the hands of the public being the exact mandate of the entity. The systematic attempt however at disaggregation of competitively sensitive information such as cost composition, beyond what Comair is willing to disclose itself to its own Shareholders, comes across as hypocritical and self-serving.
MANGO SOC (LTD) Condensed Cashflow Statement for the 9-months ending September 2012
Additionally, other pertinent performance indicators applicable to Mango’s current financial year include:
The fundamentals of Low Cost aviation, namely scale growth, positive cash generation and high asset utilisation and productivity reflect strongly within Mango an entity that operates under a strict governance framework and structure that includes the Company being subject to accepted Accounting (with a major auditing firm as external auditors and, incidentally, Mango’s internal audit function being performed by the same audit Group that is responsible for Comair’s external audit function), Safety (inter-alia as applied through the Civil Aviation Authority) and Regulatory (inter-alia Competition regulations) prescripts. These attributes, intrinsic to Mango as a stand-alone company, contributes to financial sustainability of the entity, even in tough economic times characterised by increasing cost, declining demand and increased price-sensitivity. In this regard Mango, subsequent to a loss realised in its maiden full fiscal (which, contrary to competitor rhetoric, was fully disclosed in the SAA Group’s financial statements for the year ending March 2008 referwww.flysaa.com), has maintained bottom-line profitability through the challenges posed by record fuel prices in 2008 (break-even FY2008), depressed demand associated with the Global Economic Crisis of 2009 (R10.9m profit) a stable year in 2010 (R13.7m profit) and a challenging 2011 (R300k profit). With the combination of high fuel cost, increases in regulatory charges, suppressed demand and excess supply (following the further entry of Velvet Sky in 2011) fully accounted for and reflected in Mango’s FY2012 loss (amounting to approximately R58 per passenger, or roughly equivalent to the increases in regulatory charges), the Company is again on track to return a profit for the current fiscal. The assertion that Mango has realised excessive losses since its inception is accordingly factually incorrect.
Turning to other matters of unsubstantiated allegations:
Cross-subsidisation of services Mango receives three types of major services from its parent Company, SAA:
Mango’s alleged complicity in 1Time’s demise
Comair chooses, at a time of material global and local Industry crisis and, more specifically, a time of human hardship for 1Time employees, to assert underhanded practices on the part of Mango, when in fact:
The South African economy requires a strong and vibrant aviation Industry in order to prosper, a situation to which the Department of Enterprises has expressed its commitment through nurturing successes such as Mango and by taking decisive action, as is currently in progress through the recalibration of South African Airways.
As its shareholder, the Department of Public Enterprises has mandated Mango to manage any queries arising from this statement.
For media enquiries contact:
Hein KaiserMango Communication082 5200 firstname.lastname@example.org