SA Airlink will have to wait to learn fate
SA Airlink has launched an urgent application in the High Court in Johannesburg to recoup hundreds of millions of rands in airfares from the embattled South African Airways (SAA).
It said the livelihoods of its more than 1 700 employees hang in the balance and unless these monies are paid, it could soon be forced to close its doors.
The matter was argued yesterday but judgment was reserved.
As per an agreement between SAA and Airlink, the former had for some time been selling tickets for the latter’s flights on its own platforms, using its own computer system, and the funds in question in these proceedings – which total R536 million – were the proceeds of the sale of these flights for November and December last year.
At the heart of the case is the stance taken by the business practitioners that were late last year appointed to the helm of the now bankrupt SAA’s controversial business rescue, that these funds constituted a debt owed by SAA to Airlink and were thus subjected to the moratorium that was placed on creditor claims during a business rescue.
Airlink disagreed, its stance being that these funds in fact belonged to Airlink and were its property.
Advocate Rafik Bhana for Airlink, described the issue at hand as “the unlawful appropriation of what is essentially trust money, held by SAA and the improper use and retention of that”.
He said SAA’s only defence was that its relationship with Airlink was one of a creditor and a debtor and that, as a result, Airlink “must wait your turn in due course”.
“Of course, we know that in due course, there’s going to be no money to pay these creditors,” he said. “But in any event it’s an unhelpful characterisation”.
Bhana said the relationship between the two was, in reality, one of a principal and an agent,
“The funds belong to Airlink … subject to the deduction of commissions by SAA,” he added.
“Airlink is not a supplier to SAA of airline tickets and passenger seats. Airlink is a principal, with SAA as its agent,” Bhana said.
However, Advocate John Suttner, for SAA and the business practitioners, described the relationship as an “alliance”.
And of the ownership of the monies, Suttner said: “My learned friend has repeatedly said that SAA was holding the funds on trust.
“If the funds were held on trust, there may be a case against SAA.
“You will not find the word ‘trust’ in either the founding affidavit or the replying affidavit. We say it is wrong for that proposition to be put to the court.
“If it was in the affidavit it would have been denied.”