Comair tries to end government’s bailouts to SAA

IN THE David versus Goliath court battle involving national airline South African Airways and private company Comair, the state and SAA dished out some blows yesterday.

Comair approached the Pretoria High Court in a bid to put an end to government bailouts of SAA.

Earlier this week, their advocate David Unterhalter told the court that the regular bailouts had a negative aviation players.

In late 2012, a R5-billion loan guarantee for a period of two years was granted to SAA, based on an agreement that a turnaround strategy would be created.

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But in 2014 the indebted state airline again sought government funding and this year received another R6-billion cash injection from the public purse.

To date, SAA has raked in more than R30billion from government coffers.

Yesterday, Advocate Jeremy Gauntlett, representing the minister of finance, slammed Comair’s application, saying it should fail.

The court heard that SAA had received nine bailouts at a time when the carrier was in a “dire” situation.

Both Gauntlett and SAA’s advocate, Hamilton Maenetje, said there was no basis for the application.

It was argued that the decisions to bail out the carrier were taken in consultation with parliament and the financial and socio-economic impacts of refusal were considered.

But Judge Hans Fabricius said: “If one looks at the facts … the minister took the decision purely based on financial [reasons]. There were no socioeconomic factors to support the decision.”

Gauntlett admitted that SAA may need yet another bailout, but could not confirm this, and argued that Comair wanted to see the demise of the national carrier.