* Regulator conducted audit at SAA Technical
* Found unspecified irregularities
* SAA, Mango, kulula.com, BA flights affected
* SAA in severe financial crisis
(Adds context, transport minister, analyst)
By Alexander Winning
JOHANNESBURG, Oct 22 (Reuters) - South African Airways (SAA)
and other carriers grounded aircraft and cancelled 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 ageing 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 cancelled 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)
International Airlines (IAG)
