Acsa deals another blow to Skywise

Airports Company SA (Acsa) has notified Skywise on Tuesday that it is not in a position to accede to the low-cost airline's suggested payment terms for outstanding debt as well as future charges.

Acsa suspended Skywise's flights on December 2 due to unpaid airport charges for landing, take off, parking of aircraft and related service charges. The Air Services Licensing Council will meet on December 9 in order to determine whether Skywise can resume flights again on December 10.

Skywise has already appealed to President Jacob Zuma, Deputy President Cyril Ramaphosa, Minister of Transport Dipuo Peters, Acsa and South African Airways (SAA) for assistance. It is also looking for investors to come forward by Tuesday.

On Monday even the airline's brand ambassador Ndileka Mandela, a granddaughter of Nelson Mandela, expressed the wish that the authorities would resolve the issue of Skywise's grounding of flights.

Acsa CEO Bongani Maseko informed Skywise co-chair Tabassum Qadir on Tuesday that he acknowledges the effort that Skywise has put towards paying the debt and the terms therein, but that the latest payment terms proposed by the airline on Monday was not acceptable.

"As you are aware, Acsa is a well-managed state owned company. This essentially means that we operate fully as a business that must ensure we mitigate risks and ensure shareholder returns, without eroding the value of the company," Maseko said in a written response to Skywise.

"It is, therefore, prudent that we must act responsibly and be consistent at all times."

Maseko said granting additional further relaxed terms to Skywise and lifting the temporary suspension may have macro-economic effects on the organisation.

"Acsa is unable to accommodate such a request, as this may set a precedent which may compromise the organisation in the market and affect our sustainability as an organisation," according to Maseko.

Acsa has informed Peters of its position in light of her role as the minister responsible for transport entities. Peters had earlier informed Skywise that its suspension relates to a contractual matter and the plea should be made directly to Acsa and other relevant state owned enterprises.

"Skywise must appreciate that setting such a precedence could be detrimental, with huge macro-economic effects to the organisation," Peters informed Skywise last week.

The department, therefore, referred the matter back to Acsa for consideration and a final decision.

Acsa is, therefore, holding Skywise to payment terms agreed to on September 16 2015. This involves a weekly pre-payment of R931,892.90 to reflect on Mondays by 10:00 as well as a payment of R1,639,695.32 in six monthly instalments from October 1 2015 to March 1 2016 towards Skywise's arrears of R9,571,226.55.

Due to a reduced flight schedule by Skywise, Acsa reduced the weekly pre-payments due as from October 28 2015 to R670 523.68 to reflect by 10:00 on Mondays.

On the other hand, Skywise proposed to Acsa on Monday to pay R500 000 immediately and then go on "pay-as-you-fly" from December 15 2015. In addition, Skywise proposed to pay off its arrears at R50 000 per day starting from January 15 2016. The airline said it has obtained bridging finance on condition that Acsa accepts its proposed payment terms.

Qadir told Acsa on Monday that due to the recent grounding of its flights over missing its obligation to pay an instalment of R1.6m and not being granted an extension requested of 48 hours, "Skywise is facing huge commercial and financial embarrassment in the industry and in the eyes of consumers".
 
"The embarrassment has led Skywise to lose its reputation with all existing potential investors. However, unexpectedly, we received support from the public willing to come forward and support. This would be a time consuming process," said Qadir.
 
"Meanwhile we have to prioritise accommodating the currently booked passengers during the festive season."

Source: Fin24