Comair to challenge SAA bailouts

2015-05-05 05:31
(File, Fedor Selivanov, Shutterstock)

(File, Fedor Selivanov, Shutterstock) (Fedor Selivanov /

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Pretoria - The North Gauteng High Court in Pretoria will on Tuesday hear Comair's challenge against government's bailout of SA Airways (SAA).

The matter is expected to be heard until Thursday.

Comair, which is a franchise partner for British Airways and also operates the low-cost airline brand, launched the court challenge in February 2013 following the government's then bailout of R5bn.

In October 2012, government granted SAA a R5bn guarantee for 2 years. One of the conditions for the guarantee was that SAA's board had to develop a turnaround strategy.

In October 2014, SAA again sought government support, two years after it was granted the R5bn in loan guarantees.

Second injection

In January 2015, Finance Minister Nhlanhla Nene announced SAA would receive another R6.5bn injection from the state. This was after he said in his mini budget in October 2014 that the state carrier would not be bailed out and be restructured to become financially sustainable.

According to Comair CEO Erik Venter the court case was launched because the airline regarded the bailouts and certain other government payments to SAA as not compliant with domestic aviation transport policy or the law.

He told Business Report that Comair wanted to ensure all domestic airlines faced the same risks and requirements to operate on sound commercial principles.

Venter said Comair did not want to stop all financial support for SAA or to shut or privatise the airline, but wanted any help to be in line with domestic transport policy, to minimise the impact on other operators.

Read more on:    saa  |  comair  |  nhlanhla nene  |  pretoria  |  aviation

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