Thursday, March 22, 2012

Velvet Sky loses operating license

Velvet Sky has been grounded by the Civil Aviation Authority.

Velvet Sky, which has been grounded since March 5 after running into millions of rand in debt, will remain on the ground – the Civil Aviation Authority (CAA) has suspended its operating license.

CAA spokesman Kabelo Ledwaba said the suspension was a temporary move.

Following discussions with Velvet Sky’s management, the CAA had decided to temporarily withdraw the airline’s aircraft operator certificate, Ledwaba said.

This would let the CAA conduct the necessary safety and compliance oversight over the resumption of operations upon confirmation from Velvet Sky that it was ready to resume operations, he said.

Ledwaba said the CAA would review the situation and lift the suspension if it was confident that safety and legal compliance were not compromised.

The latest development was discussed on Facebook.

A post yesterday read: “The CAA has withdrawn its Aircraft Operator Certificate. A completely new and separate airline is to be built from the ground up, run by the very good people we had, who are now rid of the very bad bad (sic) people. It will, of course, not happen overnight.”

The Mercury could not reach Velvet Sky CEO Dhevan Pillay or chief operations officer Gary Webb yesterday.

However, flight operations director Paul Green said the airline’s certificate had been temporarily suspended within the context of its “current financial difficulties”.

He said a business rescue process aimed at restructuring Velvet Sky to get the airline back into the air was still under way.

“There is a lot of speculation going around. Sensitive negotiations in the business rescue process are under way, and premature comments being made are not good. These sorts of comments could jeopardise negotiations,” said Green.

He said he was not directly involved in the negotiations and had no indication when Velvet Sky would be back in the air. Green said no staff had been retrenched. However, they had been put on “short-time”.

Velvet Sky’s troubles first hit the headlines on February 22, when flights were delayed following a financial dispute with service provider SAA Technical.

It then suspended all flights from February 27 in the wake of BP filing papers for the airline’s liquidation after it failed to pay money owed for fuel.

BP claimed in the Pietermaritzburg High Court last month that Velvet Sky owed R29 million for aviation fuel. The airline averted the liquidation application after coming up with a business rescue plan.

Velvet Sky, whose majority owner is Excalibur Aerospace, said at the time that discussions were under way with a number of parties about its future ownership.

Excalibur Aerospace is headed by Joburg lawyer Stephen Nthite. Pillay, the airline’s founding CEO, is also a shareholder.

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