South African Airways reverses stance on lease discounts to unit

South African Airways said it didn’t sub-lease planes at a discount to low-cost unit Mango Airlines, reversing an earlier statement after the budget carrier’s outgoing CE denied it was subsidised. While SAA did sub-lease a number of aircraft to Mango over the past 10 years, an assessment of the transactions in March showed that “all such agreements had been concluded on a full cost-recovery basis,” the carrier said late Wednesday. “These aircraft were accordingly not leased at a discount.” SAA said June 11 it sub-leased planes to Mango at a “substantially discounted cost” and paid the leasing company the market rate, an arrangement that could have given the budget carrier an advantage in South Africa’s competitive market. <br/>