PRETORIA, May 6 — South African domestic carrier Comair has approached the High Court in Pretoria to declare the government’s bailout of national flag carrier South African Airways (SAA) illegal.
Comair is a partner of British Airways and the operator of the low cost airline Kulula.
The publisher of the SA Flyer aviation industry magazine, Guy Leitch, meanwhile says that subsidies provided by the government to SAA make it difficult for private airlines to compete.
“It’s about fair competition or about having what we call a level playing field. For a long time, ever since the privatisation of SAA from Transnet, the government’s domestic aviation policy required that all competitors have an equal opportunity or an equal chance to compete and Comair argues with considerable justification that massive state subsidies for SAA make it much harder for it to compete.”
Comair Chief Executive Officer Eric Venter said the subsidies gave SAA an unfair advantage against its competitors. “Our real issue is the impact this has on SAA because of the fact that they are immune to bankruptcy,” said Venter.
Venter also raised the fact that Comair had an issue with some of the legal issues which had taken place such as the funding not being part of the national Budget approved by Parliament.
In January, Finance Minister Nhlanhla Nene approved an additional guarantee of 6.488 billion Rand (about 541 million US dollars) for SAA, taking the total guarantees granted to the airline to R14.4 billion.