Comair gets R1bn damages windfall

The share price of JSE-listed aviation group Comair Limited shot up by more than 20% by close of trade on Friday, after it announced that it would be getting R1.1 billion from state-owned SAA.

This follows a settlement deal being reached over an anti-competition case dating back 14 years.

It’s a major windfall for Comair, which operates kulula.com and British Airways in SA, but comes as a further financial blow to cash-strapped SAA.

Comair advised shareholders of the settlement with SAA in a Sens statement, which relates to a damages claim served by Comair against SAA in respect of the national airline’s anti-competitive travel agent incentive schemes.

Comair said it was pleased to advise shareholders that it has entered into a full and final settlement agreement with SAA. The settlement agreement was made an order of court by the Supreme Court of Appeal (SCA).

“In terms of the Settlement Agreement, SAA will pay Comair a settlement amount of R1 108 040 000 plus interest.

“The settlement amount will be made in accordance with a payment schedule commencing on February 28 2019 and terminating on July 28 2022, or earlier should SAA elect to make payments earlier than agreed,” it said.

In addition, SAA will pay Comair’s taxed legal costs incurred to date. Both Comair and SAA will withdraw the appeal and cross-appeal before the SCA.

SAA’s settlement with Comair follows the South Gauteng High Court ruling in favour of Comair in its damages claim February 2017. SAA spokesperson Tlali Tlali is yet to respond to queries from Moneyweb.

While the settlement brings an end to the 14-year spat, it represents a double financial blow for SAA by Comair within six months. In October Comair said it would cease giving SAA Technical maintenance business due to poor service from SAA.

SAA will pay Comair the settlement plus legal costs incurred up to date.

Comair in a Sens statement