As SA Airways (SAA) is down to the last R99-million it can borrow against the government’s guarantee‚ it should be placed under business rescue‚ the DA said yesterday.
The party made this claim in the wake of a court ordering SAA this week to pay R104-million plus interest to Nationwide Airlines for anti-competitive conduct‚ and reports that the cash-strapped airline might face a further court bill from a similar claim by Kulula’s owner‚ Comair.
DA finance MP Alf Lees described the ruling as just another nail in the beleaguered airline’s financial coffin.
“The judgment has set a precedent‚ which should be of concern to the national Treasury and Finance Minister Pravin Gordhan‚ as Comair is seeking damages in excess of R1-billion in litigation‚ based on similar circumstances‚” Lees said.
“This is certain to plunge SAA into further financial disarray‚ necessitating the need for the airline to be placed under business rescue.”
Lees put the total of the Nationwide award at R140-million – once interest charges are added – and said: “SAA now has no wriggling room left‚ as the remaining R99-million that it can borrow against the R15- billion government guarantee is not enough to meet the Nationwide judgment.
“The R140-million added to the leaked first-quarter loss of R1.3-billion means SAA will in all likelihood start defaulting on creditor payments.”