South African airlines ground flights after faults found at SAA maintenance unit

By Alexander Winning

JOHANNESBURG (Reuters) - South African Airways (SAA) and other carriers grounded aircraft and canceled domestic flights on Tuesday after South Africa's aviation regulator instructed the loss-making state airline to address problems at its maintenance unit.

The instruction is the latest blow for SAA, which has not made an annual profit since 2011 and is dependent on government bailouts for its survival.

It has floundered with an unprofitable route network and a fleet of aging and inefficient airplanes.

The South African Civil Aviation Authority (SACAA) said it had inspected a number of aircraft at SAA Technical and had issued a prohibition order until the faults it had found had been fixed.

It did not disclose what the faults were or which aircraft type was affected, citing confidentiality agreements.

SAA Technical does maintenance for SAA, its subsidiary Mango Airlines and British Airways franchise partner Comair, which also operates under the kulula.com brand.

The regulator said it had accepted a corrective action plan from SAA's maintenance unit and that SAA and Comair's decision to "self-ground" some aircraft was a precautionary measure.

"SAA understands that the inspection conducted by SACAA was in accordance with its regulations and a necessary exercise to ensure compliance and safety," SAA said in a statement.

The airline said it had canceled four domestic flights, and that it would combine services and deploy bigger aircraft to accommodate affected passengers.

SAA spokesman Tlali Tlali told eNCA television that 25 of the company's planes had been grounded for a "compliance verification process" but that 19 of those had since been returned to service.

He said the remaining planes would go back into action on Tuesday evening or Wednesday.

Although the immediate financial impact on SAA was expected to be limited, analysts said the faults uncovered by the inspections highlighted that the firm was in trouble.

"These faults raise further questions about whether SAA is viable in the longer term," said Nigel Rendell, director for Europe, Middle East and Africa at Medley Global Advisors.

South African officials have been searching for an equity partner for SAA, but those efforts have been unsuccessful so far.

'CORRECTIVE ACTION'

SAA's Tlali said no international flights had been affected. SAA mainly operates Airbus aircraft on its passenger routes, while subsidiary Mango Airlines operates Boeing aircraft, he said.

Mango Airlines said there would be some delays on flights throughout Tuesday.

Comair said that as of 10:15 a.m. local time (0815 GMT) a third of its services had been affected. It said "corrective action" was needed on some of its aircraft and that it expected its full fleet to be back in operation by Wednesday.

At 1355 GMT kulula.com's website showed that five domestic flights on Tuesday afternoon had been rescheduled, one under the kulula.com brand and four under the British Airways name.

Flights earlier in the day were also rescheduled.

Comair, whose share price fell 3.4% on Tuesday, operates Boeing aircraft.

Transport Minister Fikile Mbalula appealed for calm at a news conference.

"We appeal to the public to be patient and be on the lookout for updates from their airlines where there may be delays and cancellations," Mbalula said. "Safety of our people is paramount."

(Additional reporting by Nqobile Dludla and Wendell Roelf; Editing by Jason Neely, Deepa Babington and Jan Harvey)