SAA pilots

facebook / FlySAA

Taxpayers, prepare to foot SAA’s R1.1-billion bill to Comair

Another bill that we, taxpayers, will most likely have to sign for.

SAA pilots

facebook / FlySAA

The 14-year-old competition case between South African Airways (SAA) and Comair has finally reached a settlement. However, not without the national airline having to fork out R1.1-billion, including legal costs, to the plaintiff.

What was the dispute between SAA and Comair about?

As reported by Business Day, the British Airways franchisee had called the national airline to account based on the accusation that the national airline was guilty of anticompetitive behaviour in 2006.

ReadTravel nightmare: SAA cancel flights on Malawi route “for safety reasons”

The gist of the argument, from Comair’s perspective, was that SAA had been issuing incentives to travel agencies that diverted customers towards them and away from competitors.

Taxpayers expected to foot R1.1-billion SAA bill

On Friday, it was revealed that matters had finally been concluded between the two parties and that the national airline would begin payments of R1.1-billion, including legal fees, from the end of March until July 2022.

The question that has been left unanswered is: Who will foot this bill? The national airline is already on the verge of collapse.

ReadSAA: Here’s how much has been spent on their bailouts since 1999

SAA failures termed a “legacy issue”

The state-owned entity (SOE), like Eskom, revealed that it had about three months left to survive before collapsing, if it did not receive a R21.7-billion bailout from either the government or refinancing from banks.

It is already a travesty that the airline failed to submit its financial statements for the period 2017-2018 to parliament. Now, the taxpayer stands to foot a hefty bill that was largely avoidable.

SAA, reacting to the settlement conceded that this, more than anything, was a “legacy issue”.

ReadSAA will lose more billions of rands in next two financial years, according to CEO

Tito Mboweni expected to announce SAA bailout plan

Much remains to be seen but Finance Minister, Tito Mboweni, is expected to address the matter and indicate where this money is going to come from.

Excluding the legal costs, as there is no indication of how much the bill for that is, SAA is expected to fork out around R28.9-million per month.

The national airline did reveal that the settlement plan was proposed by them. This, according to SAA’s CEO, Vuyani Jurana, is the first step in revamping operations at the struggling SOE.

ReadDeveloping: SAA will be split into three departments – here’s how it will work

Another plan that was revealed by Jurana, on Monday, was the split of SAA into three units — domestic, regional and international business units — each with their own management structure.

“We want to build a new SAA, fit for the future, place the right people in the right jobs,” Jurana enthusiastically stated.