South African carrier FlySafair interested in buying SAA’s low-cost arm mango

South African carrier FlySafair is interested in buying the low-cost arm of state-owned South African Airways—if it’s put up for sale by the embattled national carrier.

FlySafair management has approached SAA’s administrators about a possible acquisition of Mango Airlines, Chief Executive Officer Elmar Conradie, 44, said in an interview on Tuesday. However, the business-rescue experts made clear their priority is to complete a turnaround plan of the main carrier due at the end of the month, he said.

“The only one that makes sense is Mango,” the CEO said, when asked if he would be interested in any future SAA asset sales. A move for SAA Technical, which provides aircraft maintenance, would be “total overkill” given FlySafair’s fleet is already serviced by its parent company, Safair Operations (Pty) Ltd., he said at Bloomberg’s Johannesburg office.

South Africa’s government put SAA into a local form of bankruptcy protection late last year to end a damaging cycle of state bailouts and ever-mounting losses. The administrators have cut a number of routes, including all domestic flights except Johannesburg-Cape Town, and started talks with labor groups on job cuts that could affect more than 4,700 workers.

Closely held FlySafair, which began operations six years ago and flies to seven destinations around the country, has at the same time been adding routes and increasing frequencies. The carrier will announce a new Johannesburg-Durban service next week, the CEO said, and is steadily upgrading its fleet from aging Boeing Co. 737-400 models to more modern 737-800s.

FlySafair sees capacity increasing by 15% this year, and the airline has yet to see any impact on bookings from the spread of the coronavirus, which has forced international carriers including Delta Air Lines Inc. and Air France-KLM to cut thousands of flights. The South African carrier doesn’t carry many international passengers, the CEO said, while only 13 cases of the virus have been identified in the country to date.

“It’s not having an impact on us yet,” Conradie said. “It could become much worse.”

FlySafair attempted a tie-up with fellow domestic carrier SA Airlink (Pty) Ltd. two years ago, but the merger was abandoned following opposition from the Competition Commission. A move for Mango will likely face similar regulatory scrutiny, but the need for new shareholders for state aviation assets may outweigh that concern, Conradie said.

The company is 25% owned by Dublin-based ASL Aviation Holdings.