A group of employees of State-owned regional airline SA Express (SAX), which is currently under provisional liquidation, have employed equity crowdfunding platform Uprise.Africa to help them raise capital to save the airline. They believe that, with the right strategy, the airline could be viable and profitable and that it should not be liquidated.
Uprise.Africa carried out a preliminary review of the proposed business plan for SAX. It then submitted an Expression of Interest to the airline’s provisional liquidator. Its proposal requires the approval of the shareholders and relevant authorities as well as the liquidators.
“Liquidating SAX translates into slicing through the very artery that feeds the minor towns and cities in [South Africa], and closing the gateway to our more rural areas,” asserted SAX spokesperson Michael Hlatshwayo. “One of the major factors in improving our economy, would be to stimulate internal travel by South Africans taking ‘sho’t lefts’ through the country. Without a skilled carrier such as SAX, this becomes difficult for many everyday South Africans.” (‘Sho’t left’ is South African slang, derived from minibus taxi commuters, meaning that they want to get off the vehicle; it was adapted for use as a slogan promoting domestic tourism.)
Liquidating the airline would also severely affect its employees. Of SAX’s staff, 60% are based in minor cities, providing valuable economic activity for those municipalities and supporting thousands of other jobs. Moreover, 30% of its workers come from rural areas, where skills are scarce. The airline and other companies could help develop skills in these districts.
“The airline’s internal financial troubles stem from political interference in its operations, nepotism, poor controls and poor management, exacerbated by external challenges – we can change this!” he assured. “SAX’s fundamental business models are sound with small, cost-efficient aircraft, under-serviced destinations and exclusive, high-value routes. The execution of a revised business model and right-sized operation, by competent management, free of political interference, will return the airline to profitability.”
SAX employees are also seeking to secure retrenchment packages from the Department of Public Enterprises. “A ‘survival mode’ is important for them to emerge with [a] stronger mindset to shape their future vision with a new perspective and lay the foundation for implementing this new approach,” pointed out Uprise.Africa CEO Tabassum Qadir. “It takes a lot of hard work to publicise your offering and attract potential investors.”
The equity crowd-funding platform will carry out additional due diligence on the project before it puts it live on its platform for its accredited and registered national and international investors. It will employ Lufthansa Consulting to execute this due diligence.