in Business & Finance

Airlink disappointed by Supreme Court of Appeal decision on claim against SAA

Posted 16 December 2020 · Add Comment

Airlink Ltd has noted with disappointment but respect, the South Africa Supreme Court of Appeal’s decision to dismiss its claim against South African Airways (SAA) with costs.

Above: Airlink's new tail feathers.
Courtesy Mark Mansfield - Airlink 2020


This follows Airlink’s application to the Johannesburg High Court in January for leave to sue the state-owned airline, which had then just recently been placed in business rescue and for a declaratory order that would compel it to return ZAR510million of funds from ticket sales that SAA had collected on Airlink’s behalf.   

In a statement following the Court's ruling on 1st December 2020, Airlink said: 'While Airlink fully respects today’s Supreme Court of Appeal’s order dismissing the case, it is nonetheless disappointing and demonstrates that the law is not always just. It has always been Airlink’s firm view that the funds collected by SAA on Airlink’s behalf, was never for SAA to keep or spend. However, SAA has been able to hide behind the legal veil of business rescue, to withhold and consume Airlink’s money, even though it had no legitimate commercial or transactional basis for doing so.  

Unlike other trade creditors that are owed money by SAA for goods supplied or services rendered, Airlink’s claim relates to funds collected on its behalf by SAA for services Airlink provided to its own customers. Under the 23 year old franchise agreement between the two airlines that existed at the time, Airlink tickets were sold and ticketed through SAA’s computer reservations system and SAA was obliged to collect and temporarily hold the funds and pay them over to Airlink in monthly tranches for those tickets flown in the preceding month. Airlink in turn paid SAA for those services rendered.

SAA defaulted on remitting funds for tickets flown in November but owed in December. Shortly after entering business rescue, SAA made it clear it would not honour the terms of its agreement with Airlink. This prompted Airlink to terminate the franchise (it ended in June 2020) and to rebuild its business independently of SAA.

Airlink will study the judgment and consider its options.

In the meantime, Airlink has said it is focused on rebuilding its business which was ravaged by SAA’s default and the national lockdown regulations that decimated the air travel and tourism industries. Airlink recently unveiled its new livery and is in the process of launching and resuming flights on a number of new and reinstated domestic and regional routes across Southern Africa. It has also entered into commercial agreements with some of the world’s leading airlines including Qatar Airways, Emirates, Air France-KLM, British Airways and United, which enable it to develop new traffic feeds plugging into the world’s biggest global networks.'

Airlink is a privately-owned regional airline serving a comprehensive network of smaller destinations throughout Southern Africa. Since June 2020 Airlink services have operated under the carrier’s unique 4Z flight code. Airlink is Southern Africa’s largest (measured by flight movements) independent airline. Last year its fleet of more than 50 modern airliners carried two million customers on more than 63 000 flights, on 55 routes to 39 destinations in nine African countries and St Helena Island.

Airlink’s on time performance is consistently better than 95%, a clear indication of its determination and commitment to remain synonymous with customer centricity, punctuality, service excellence, and reliability. Airlink is the most on time South African airline for 2020 as measured by the Airports Company of South Africa.


 

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