Mango Airlines' return to the sky hits major stumbling block
The ruling follows a legal challenge from Aviation Co-ordination Services (ACS) – a key creditor owed approximately R2.91 billion – who questioned both the fairness and viability of the proposed rescue strategy, which was developed by business rescue practitioner Sipho Sono.
ACS, responsible for vital aviation services such as baggage and cargo screening, argued that the plan grossly undervalued creditor compensation, offering only 4.43 cents on the rand.
Describing the offer as 'negligible, if not nominal,' ACS claimed the plan lacked a solid foundation for long-term financial recovery.
When Mango entered business rescue in 2021, the airline had few tangible assets, with most of its operational capacity dependent on leased aircraft and infrastructure.
The business rescue plan included a controversial compulsory cession clause, which the court has now declared 'invalid and of no force and effect.'
In a scathing critique, Judge Fisher rejected Sono's opposition to the ACS application, describing it as 'unmeritorious' and raising further questions about the fragility of the airline's recovery efforts.
Despite the setback, Sono has instructed his legal team to appeal the judgment, attempting to salvage a rescue plan that has been years in the making.
However, the road ahead appears increasingly uncertain, with ongoing negotiations with creditors and the urgent need for investment looming large.
The prolonged grounding of Mango has not only crippled its operations but also affected countless employees, customers, and industry stakeholders, highlighting the broader challenges plaguing South Africa's aviation sector amid continued economic volatility.
The full court judgment is available via the Southern African Legal Information Institute (SAFLII).
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