Acsa blamed for 1Time demise

9 Novem­ber 2012 6:54

The Air­ports Com­pany of SA (Acsa) was blamed for low-​cost air­line 1Time’s demise.

1Time was put under pro­vi­sional liq­ui­da­tion by the North Gaut­eng High Court yes­ter­day after a failed attempt to res­cue the business.

Busi­ness res­cue allows com­pa­nies in finan­cial dis­tress to be reha­bil­i­tated under super­vi­sion and sub­ject to a court order.

Acsa was only inter­ested in recov­er­ing all its debts with­out con­sid­er­ing the rip­ple effect this might have on the airline’s oper­a­tions,” said 1Time’s busi­ness res­cue prac­ti­tioner Ger­hard Holtzhauzen.

Acsa was the airline’s largest cred­i­tor, claim­ing R147 mil­lion, and had an “over­all neg­a­tive attitude”.

The com­pany forced 1Time to pay for cur­rent ser­vices in cash the day after ser­vice was ren­dered, and in advance over week­ends and pub­lic holidays.

The afore­men­tioned pay­ment terms con­strained 1time’s cash flow,” Holtzhauzen said.

To make mat­ters worse the rec­on­cil­i­a­tion done by Acsa set off pay­ments received to his­toric debts, despite the his­toric claims being ring-​fenced.”

As a result, share­hold­ers were reluc­tant to take up a rights issue in 1Time Hold­ings, which would have boosted the strug­gling air­line by about R80 million.

A major inter­na­tional air­line com­pany had expressed inter­est in acquir­ing the air­line. But the tim­ing and trans­fer of the busi­ness, as well as its short term cash require­ments, had caused it to back out.

In addi­tion, 1Time’s old air­craft were not nearly as fuel effi­cient as more recent models.

With fuel costs con­stantly ris­ing, this put addi­tional strain on the business’s profitability.

In the early stages of the busi­ness res­cue process, ticket sales were on an accept­able level to sus­tain the airline’s daily oper­a­tions,” he said.

Later, ticket sales decreased, con­tribut­ing to the loss of prof­itabil­ity and higher cost to keep the air­craft in the air.

Last Fri­day, 1Time had an oper­at­ing cash short­fall, which would have increased the fol­low­ing week.

The impact deci­sion to ground all air­craft and sus­pend the ser­vice with imme­di­ate effect was taken to ensure that 1Time’s safety would not be com­pro­mised,” Holtzhauzen said.

As a result, min­i­mal warn­ing was given, and oper­a­tions were shut at 3pm.

Pro­vi­sional liq­uida­tors Hannes Muller and Aviwe Ndya­mara, from Tshwane Trust­ess, would now take over from Holtzhauzen.

Pro­vi­sional liq­uida­tors can rec­om­mend to the court the liq­ui­da­tion order be lifted and the com­pany resus­ci­tated, or that the air­line be placed in final liquidation.

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