Mango reports loss for only second time in its 10-year history

SOUTH African Airways (SAA) subsidiary Mango, which directly competes with other low-cost carriers in the domestic market, made a net loss in the 2015-16 financial year for only the second time in its 10-year history, according to the SAA annual report.

The rand decreased against the pound, due to South Africa’s weak currency. The rand weakened against the dollar on Tuesday, mainly reflecting broad dollar strength on resurgent United States (US) interest rate hike expectations, while stocks tracked European equities higher.Mango airlines caters for all income groups, due to the drastic lowering of petrol prices in South Africa. Mango passengers should expect to pay from R395 one way between Cape Town and Port Elizabeth while reductions in fares across all other network points will be rolled out this week. Mango spokesman Hein Kaiser said fares would be between 25 and 35 percent cheaper on the Cape Town-to-PE route while fares from Cape Town to Joburg will be under R1 000.

The lack of information about Mango’s finances has been sharply criticised in the past by its competitors. They have also complained about the R100m financial facility SAA granted Mango in 2007, on the grounds that this creates unfair competition.

The SAA annual report said the R100m facility remained open “for Mango to utilise at its own discretion as and when it needs cash funding.”SAA is still encouraging Mango to prosper, even though it has made another financial loss. “First you don’t  succeed dust yourself off and try again.”

The operating performance on a flat R30bn revenue improved due to R1.1bn savings, lower fuel and impairment costs. The gains from the lower fuel price were however largely wiped out by a weak exchange rate which had a R1.2bn impact on the operating result.

 

 

Mango reports loss for only second time in its 10-year history

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