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Unions take a stand against Mango’s dire financial situation

Numsa’s Phakamile Hlubi-Majola and Sacca’s Zazi Nsibanyoni-Mugambi outline the unions’ demands for joint business-rescue practitioners.

FIFI PETERS: South African low-cost carrier Mango Airlines has become the latest airline to enter into business rescue, signalling the pressures that the Covid-19 lockdowns continue to have on the aviation sector. At the same time the airline’s major union Numsa and the South African Cabin Crew Association plan to take the airline to court for not paying salaries, among other things.

We have Phakamile Hlubi-Majola, national spokesperson for Numsa and Zazi Nsibanyoni-Mugambi, Sacca (South Africa Cabin Crew Association) president on the line.

Phakamile, let me just start with you. Exactly what is happening here, because one statement I do have is that you are planning to approach the courts to have Mango placed in business rescue? Yet we have heard from SAA’s interim CEO that Mango has entered business rescue. Can you please just clarify the situation for us?

PHAKAMILE HLUBI-MAJOLA: Yes, indeed, Fifi, and thank you so much for having us on your show. Numsa, together with the Mango Pilots Association and the South African Cabin Crew Association and non-unionised workers actually filed papers at the South Gauteng High Court today in order for the court to basically place Mango under business rescue. We noted that SAA’s interim CEO had said that this is a course of action that SAA intended to embark on.

But, to be frank with you, Fifi, they have been saying that for a long time, and we have been engaging with them for quite a long period where we’ve been discussing the future of the airline. It’s become very clear to us that, while there was agreement that Mango should be placed under business rescue, there was no political will to actually make that happen. And while they dilly-dally and take their time making that decision, workers are really suffering.

As things stand right now we have a situation where workers at Mango have not been paid their salaries in full for six months or more and, to make matters worse, there is a liquidation application which has been filed by one of Mango’s creditors. So if we sit back and wait for the DPE (Department of Public Enterprises) or government, the shareholder, to act, we may very well find ourselves in the situation that workers at SA Express are in right now, where the airline is facing liquidation. We don’t want to leave things to chance. They have said with their mouths that this is what they want to do, but they’ve done nothing to make it happen.

This is why we had to take the drastic step that we took today and file the papers to place the airline and the business under business rescue.

FIFI PETERS: Since approaching the courts, have you heard from management?

PHAKAMILE HLUBI-MAJOLA: We have not heard from management, but I think that Zazi can probably tell you more because she’s been sitting in on all those engagements.

ZAZI NSIBANYONI-MUGAMBI: I think management has unfortunately come to the party a little late, and what they asked us to do is something that we could not have committed to. The SAA board and SAA management have asked us to basically withdraw our application not to apply for business rescue, to allow them the space to do so. We are worried about that because who (applies for) business rescue is not the issue. It’s about the airline being placed under business rescue. And we have been trying to engage them for many, many weeks, trying to talk about what we can do in order to get Mango out of this situation.

And if you recall under SAA’s business rescue as unions we asked the DPE why the subsidiaries of SAA were not being placed under business rescue, because we understood their financial situation. The DPE refused to have them placed under business rescue, and now the chickens have come home to roost. I think everyone realises that they should have been placed there a long time ago, because they are in desperate need of capitalisation by government. There’s been R819 million promised and gazetted to be paid to Mango. Treasury in particular has not paid this money over. It’s a travesty when people are coming to work on a daily basis, begging people to give them money in order to fly, and there’s R819 million which is sitting in Treasury that’s been long awaited and should be in the coffers of Mango by now.

Read: Down to two planes, Mango should’ve been in business rescue with SAA

FIFI PETERS: Zazi, you’re referring to the Department of Public Enterprises. I’m just wondering in your engagements thus far with stakeholders, if there has been any adequate reason provided to you as to why this money hasn’t been paid?

ZAZI NSIBANYONI-MUGAMBI: No. At the last meeting we were told that there were meetings the whole weekend to discuss the issue of why this money had not been paid. Mind you, they only started speaking to us when we made it very clear that we’d be filing for business rescue. Before that it was a challenge to get them to talk to us.

This whole cat-and-mouse game is not assisting anyone. It’s actually placing the airline in jeopardy and 740 jobs on the line. As unions we cannot sit by and watch Mango collapse. We have a pending liquidation that’s about to be heard and, as unions, we are taking a stand.

FIFI PETERS: So Phakamile, what happens now?

PHAKAMILE HLUBI-MAJOLA: What happens now is that we’ve filed the papers and we have requested that this matter be heard on August 3, and we’re looking forward to our day in court. We’re hoping that government will see sense and work with us because the problem that we have, Fifi, is that they say they care about this airline, but they don’t do what is necessary in order to save it. If you look at all our state-owned entities, it’s actually workers, it’s labour, that have been taking the initiative, tried to take the kind of necessary steps that will allow for progress when it comes to transformation in our state-owned entities.

It seems to us that we’re more interested in saving Mango than DPE as the shareholder is. It’s very clear, when you look at the lack of action, that they couldn’t even be bothered in some instances to respond to our correspondence on this. It was literally at the 11th hour over the weekend when we served them with papers that suddenly people started phoning us and trying to negotiate with us.

We’re saying that we are not hostile to government, but we do want government to demonstrate that they care about workers and that they care about this airline. For them to do that they must take the necessary steps to protect these assets. Why must labour? Why must it be workers, Fifi, who go to court to place this entity under business rescue? Surely that is the work of the Department of Public Enterprises.

I would really urge you as members of the media to hold this department to account for its complete failure to turn around our state-owned entities and make them viable. Pravin Gordhan likes to hide behind Jacob Zuma and the Zondo Commission and state capture, but Jacob Zuma right now is in jail, and he’s been out of government for more than two years.

At this point the only people who can take responsibility for the state of things are the people who are in power right now – and they’re doing nothing. So it’s very painful, especially for workers. Could you imagine having to come to work every single day – you don’t even have money for transport. You have no idea how you’re going to feed your children, but you’re doing it in the vain hope that your actions will ensure that this airline, which is your only means of survival, does not collapse. Why should workers have to live like that?

FIFI PETERS: All right. Zazi, if the business risk goes ahead, what does this then mean for your members?

ZAZI NSIBANYONI-MUGAMBI: Well, it gives us a bit of breathing space and allows the airline to restructure itself and basically come out stronger at the other end. Another reason we launched this application is because we feel as unions that we need a business-rescue practitioner of our choice. It might seem strange, but you’d recall the lengthy, lengthy SAA business rescue with practitioners that were not open and honest; we have to look after the interests of employees. Our aim is to work together with government. It can bring its own business-rescue practitioners and work with ours for the end goal of saving the airline.

Their refusal to do so can only mean that they have something to hide. If we all want the same thing, a successful airline going forward, it should not be a problem. So we urge them, let’s do this together, let’s find solutions collectively, and Mango will succeed at the end of the day.

FIFI PETERS: How long then do you expect the process to be?

ZAZI NSIBANYONI-MUGAMBI: Business rescue ordinarily takes about 30 days to three months and we want it to be that short because we understand that business rescue could be costly. But we also understand that without it there is no airline at this current (moment). Note as well that the SAA board has recommended business rescue, the Mango board has recommended business rescue, so it is the only way to go. We want a short quick restructuring, a quick process, which can see Mango given back to the stakeholders that be, and for us to save jobs. That’s our number one prize.

FIFI PETERS: Phakamile, just lastly, given that it seems everyone is on the same page now and a request has been made from Mango, for instance, to settle this out of court – is this something that you’d be open to doing?

PHAKAMILE HLUBI-MAJOLA: The only option for us is for government to jump on board with this business-rescue process that we have initiated. We’re not willing to withdraw the process as they have requested. We want a solution that will enable and will allow us to turn around this airline. Anything short of that won’t work for us because it’ll mean that Mango faces liquidation.

ZAZI NSIBANYONI-MUGAMBI: Just to add on what Phakamile was saying around the withdrawal of our application, we have made it very clear that we will withdraw only under specific conditions. Number one, that we have joint business rescue practitioners. Number two, salaries are paid immediately to workers. And, number three, that we conduct this process in collaboration and, I think, as well (receive) the payment of the R819 million in order to restructure the airline. Without that, like Phakamile said, we are not going to withdraw. We’re going to have to take the hard road and hopefully government can come to its senses.

FIFI PETERS: We are following this story very closely with you, but thank you for your time. We’ll leave it there. That was Phakamile Hlubi-Majola, the national spokesperson for Numsa, as well as Zazi Nsibanyoni-Mugambi, SACCA president.

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Seems that anything government touch or try to manage or run only leads to failure – mango and SAA are mere a microcosm of where the country is heading

Just give the mini airline to the union to run. Will sort it out in no time…

It’s lockout tactics by the DPE to carry on with this nonsense of not paying staff and expecting them to carry on working…it’s much easier to terminate employees who cannot afford to get to work as AWOL or treat it as unpaid leave than it is to restructure the business and pay them backpay and retrenchment packages. Where in your life have you heard of the unions voluntarily wanting to enter business rescue proceedings….it is again the communities trying to save things for themselves like during the riots. We cannot rely on this government to ‘fix’ things anymore….it’s a DIY approach from now on. It’s no wonder they want to delay the local elections…it gives them more time to mismanage and loot. I hope the courts kick out their application to delay.

End of comments.

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