Comair seeks over R1.1bn

SAA TO PAY AIRLINE DAMAGES FOR ANTICOMPETITIVE CONDUCT Both parties got leave to appeal and are awaiting a court date.

Comair CEO Erik Venter has disclosed that its R1.16 billion damages award against SAA might increase by R700 million, should a court appeal succeed.

Venter spoke to Moneyweb at an event showcasing the Comair Training Centre (CTC) in Kempton Park where the airline’s pilots, as well as those of 32 other airlines and the South African and Indian air forces, are trained.

In terms of a high court ruling last year, SAA has to pay Comair damages to the amount of R1.16 billion for anticompetitive conduct between 1999 and 2005.

SAA earlier paid R104 million damages to Nationwide on the basis of the same events, but decided to appeal the amount awarded to Comair. The court in both cases only dealt with the amount of damages, since the Competition Tribunal earlier ruled on the merits.

Venter said SAA’s appeal was probably a delaying tactic.

“We would have been satisfied with the R1.1 billion, although it’s R700 million less than what we claimed.” He said when SAA appealed, Comair decided to cross-appeal in an effort to pursue the R700 million balance as well.

Both parties got leave to appeal and are awaiting a court date.

National Treasury recently had to step in and pay R2.2 billion to one of SAA’s creditors that refused to extend the term of its loan to SAA when it became due. SAA has R19 billion worth of government guarantees and it is said to make a R370-million loss every month.

Comair earlier challenged government’s ever-increasing guarantees to SAA in court but without success.

Venter said the government, at that stage, argued that the guarantees were not in reality an expense to the fiscus. It is “merely paper”, so to speak.

When Treasury had to intervene with the R2.2 billion payment, this changed fundamentally, he said.

Government used cash to prop up SAA and that is money that could have been used for building houses, schools and so forth.

Asked how long SAA can continue operating, he said: “As long as government keeps on giving the money.”

Venter said the current aviation market is tough, but cost cutting and diversification has paid off for Comair.