The Situation at Mango

 

Hello Aviators, welcome back to the blog. It has been a very long time since I uploaded the last blog, it has been nearly 10 months. I apologize for the lack of consistency, but I aim to be more consistent this time, but anyway, onto today's blog. 

You can probably tell what today's blog will be about from the title, yes, we will be talking about the South African Low-cost carrier named Mango. Now I'm sure many of you thought that Mango was a dead business that closed its doors for good, but, that is not completely true and that is what we will discuss. To understand the situation that Mango finds itself in, we first need to understand the history of Mango.

How it all started 

In October 2006, Mango Airlines commenced operations with the first flight for the airline taking place on the 15th of November 2006. Mango was developed as a budget subsidiary of its full-service parent company South African Airways, this means that Mango is a state-owned entity (SOE) like its parent company. The aim of having Mango around was to have an airline that offered affordable tickets to the flying public as well as to compete with other budget airlines in the country at the time, such as Kulula.com and 1time. Mango was revolutionary when it launched,  it was the first airline to allow people to buy tickets at select grocery stores such as Checkers and Shoprite as well as the only airline in the world at the time that allowed people to buy tickets using store cards such as the Edgars store card. Mango's launch in 2006 marked one of the largest e-commerce events of the time with the airline receiving over 10 000 ticket requests in the first 2 days of operation. In 2007 Mango received an award for its marketing strategies, followed by another award in 2008 for the low-cost carrier of the year in South Africa, this was incredible as Mango was the new kid on the block.

Fleet and Destinations

At the peak of Mango's operations, the airline operated 9 routes which were mainly domestic with one international route. The destinations served were Cape Town International Airport, King Shaka International Airport in Kwa-Zulu-Natal, Chief Dawid Stuurman International Airport in Port Elizabeth, King Phalo Airport in East London, Bram Fischer International Airport in Bloemfontein, George Airport, Johannesburg OR Tambo International Airport as well as Lanseria International Airport located near Randburg. The sole international route was to Zanzibar International Airport in Tanzania. 

During this peak period, Mango operated 14 highly recognisable bright orange Boeing 737-800 aircraft fleet. The aircraft were laid out in an all-economy configuration with 186 seats on board the aircraft to maximise capacity and lower the cost per seat. The entire Mango fleet was leased with most of the aircraft coming from the parent company South African Airways (SAA). These aircraft had leases that had expired with SAA and were then renewed under Mango, the rest of the fleet was leased from various leasing companies, and some even came from Safair. 

The name Mango came about in quite a boring way according to one of the directors of the airline. During the planning stages, the directors were trying to find the perfect colour for the aircraft seat covers by looking through various colour cards, and by chance they came across a card with a very bright shade of orange named mango orange. All the directors loved it as it was bright and energetic which is what they wanted Mango to symbolise, it was then decided to name the airline Mango. The famous Mango logo has a very sweet backstory behind it, it was designed in collaboration with a 5-year-old girl who drew a heart on a piece of paper which was then made into the official Mango logo.                                                                                                         

   

Mango's downfall

From 2009-2018, Mango was profitable generating an average of  R240 million in profits during the given period while retaining around 30% of the market share for air travel in South Africa. This made it a very good competitor in the domestic air travel market in South Africa. During Mango's operation, it was a state-owned entity that was actually producing profits rather than costing the government in bailouts, the airline was even performing better than its parent company SAA which was reporting losses at around the same time. The big question now is, how did it all go wrong?

After years of profitability, Mango reported a loss in the 2019 financial year which amounted to around R134 Million. In the 2020 financial year, Mango reported a loss of R497 million, the reason for this huge jump was because of the global covid-19 pandemic that forced many airlines to halt all operations due to lockdown measures. Unfortunately for Mango, COVID-19 had made an existing financial crisis worse.  The introduction of more budget carriers in South Africa such as Flysafair created more competition. Flysafair was taking Mango's role as the innovative affordable budget carrier in South Africa which also meant that they were slowly eating at the strong market share that Mango had. This increased competition combined with rising fuel costs and declining demand for air travel in South Africa was just a looming recipe for disaster as it meant that Mango was making less income yet expenses were increasing.

In April 2021, Mango had to halt all of its operations because the airline was unable to make payments to South Africa's airport group Airports Company South Africa (ACSA). This matter was quickly resolved and the aircraft were back in the air, but unfortunately, a few months later in July, operations stopped once again as Mango was unable to pay for navigation services which pilots need to operate the aircraft. Since then, operations have not started back up again, Mango just could not gather the funds as many other creditors were owed money. This led to Mango entering Business rescue which is a form of bankruptcy protection in an attempt to resolve issues and start up operations again.                                                                                                                                     

    

                                                                                                                            

The Government's stance

Mango is an SOE, so many people thought that the Government would just dish out money to help Mango out like they normally did with SAA, which was the plan, well at least on paper it was. The government allocated a bailout of R10.5 Billion to SAA and its subsidiaries including Mango to assist with the financial difficulties brought on by the pandemic. Mango was due to receive R2.7 Billion at the start of 2021 to pay creditors and avoid the situation they found themselves in a few months later, but unfortunately, that money did not come on time. This meant Mango had to stop operations and return aircraft to lessors that they owed. Mango only received the funds later in the year after operations had stopped, this money was used to pay outstanding staff salaries as well as some other creditors. The release of these funds meant that the business rescue practitioner for Mango, Mr Sipho Sono could focus on a plan to get the airline back in the air rather than a liquidation plan.

The rescue practitioner along with the Department of Public Enterprises (DPE) eventually had a plan to revive the airline, which would see a major cut down in operations as well as the DPE disposing of its shares in the airline so that it could be purchased by private investors. The rescue practitioner had managed to find an anonymous party to purchase Mango, cover its outstanding debts and resume operations, all that was left was for the minister of public enterprises Pravin Gordhan to approve the plan. But, this is where the problems started, there was a constant back and forth between the department and Mr. Sono. It seemed as though the department was constantly seeking more information about the investor which Mr Sono provided but the department was still not satisfied with it. This breakdown in communication between the 2 parties carried on for months and during this time, Mango's operating licenses were suspended.

The biggest concern was that this prolonged decision-making process would make the investor lose faith and abandon the deal, forcing Mr Sono to liquidate the airline. Finally, at the beginning of 2023, Mr Sono took Minister Pravin Gordhan and the DPE to court in an attempt to get the court to make the minister approve the deal as it seemed as though the minister was deliberately dragging his feet about making a decision. 

On the 6th of September 2023, the Gauteng High Court ruled in favour of Mr Sono and stated that the minister has to make a decision regarding whether they are proceeding with the plan to sell Mango or if the department will keep it as an entity. The court stated that the minister's actions in slowing the decision-making process were "Unlawful" and "Unconstitutional", the court has given him 30 days to make a decision and if he does not, Mr. Sono may proceed with the sale of the airline regardless of what the department has to say. This means it is just a waiting game to see what the minister decides to do, but the deadline is approaching quickly.

I personally think that Mango should be sold as it still has the potential to be a success, maybe not as big of a success as at its peak, but maybe success on a smaller scale. I would also really love to see Mango back in the air because of my personal attachment to the airline, my first time flying was with Mango, and I think everyone should also just be honest with themselves, we all miss seeing those bright orange birds up in the sky. But anyway aviators,  that's all from me today, I appreciate you all reading the blog till the end as well for the continued support, but until the next blog, STAY FLYING HIGH. 

**DISCLAIMER. ALL IMAGES USED IN THE BLOG DO NOT BELONG TO ME, ALL IMAGES USED HAVE BEEN FOUND ON PLANESPOTTERS.NET AS WELL AS JETPHOTOS.COM. ALL PHOTOGRAPHERS NAMES HAVE BEEN INCLUDED IN THE IMAGES SO AS TO NOT CLAIM THE IMAGES AS MY OWN**