Airlink has launched a fresh legal bid to recover at least some of the R900m which it said was rightfully due by SAA when the flag carrier entered business rescue on December 5, 2019.
While a court judge ruled against Airlink in a case heard in 2020, a spokesperson for the regional airline said last week that court papers dated March 18, 2022 were new and “not a continuation of the 2020 case”. Furthermore, they said, Airlink’s argument was largely based on what qualified as “pre- and post-commencement” (ie, before and after the exact date when SAA entered business rescue).
In a legal summary seen by Travel News, Airlink explained to the court that its commercial agreement with SAA provided for passengers to book and pay for Airlink-licensed flights (flights flown by Airlink) using SAA’s booking, revenue and collection platforms, and that agreement further provided for payment by SAA to Airlink for the Airlink flights. Airlink also said that SAA was “obliged to pay over to Airlink the revenue” (less certain agreed deductions) once the booked flight had been flown.
Old debt
In September 2021, Airlink MD and CEO, Rodger Foster, told Travel News Airlink had attempted to recover R510m when it had taken SAA to court earlier that year. But, he said the judge had ruled that SAA did not act as an agent for Airlink when it had sold tickets on its behalf.
At the time, Foster said SAA owed R535m for tickets flown and roughly R420m for unflown. The value for flights not flown post commencement of SAA’s business rescue process was in the region of R280m and, at the time, Foster also argued that SAA owed passengers refunds, not travel vouchers, having been granted R3.2bn for refunds by BRPs. (See https://www.travelnews.co.za/article/airlink-pax-want-refunds-saa)
According to the latest legal documents, Airlink has essentially asserted claims against SAA related to both flown ticket revenue of R473m and unflown revenue of R424m as at August 31, 2021.
The dispute
Excerpts from a summary for the court read: “ …The dispute between the parties is not whether Airlink has such claims… but whether these claims remain enforceable in the first instance against SAA notwithstanding implementation of the business rescue plan… and insofar as the claims are enforceable… what Airlink’s entitlement is to distributions from the Receivership, and particulary where Airlink ranks in the payment distribution to be made in the Receivership.”
“...Airlink contends that the (business rescue) Plan, correctly interpreted, provides for Airlink to assert its claims against the ‘rescued’ SAA, and to the extent that SAA is not liable to pay Airlink, Airlink is then entitled to a distribution from the Receivership proportionately with other Unsecured PCF Creditors, and before any Concurrent Creditors (including Lessors)...”
Airlink argued that SAA remained liable, at least in part, for part of the claim even though SAA and the Receivers, on the other hand, contend that Airlink has no claims at all against the now rescued SAA, and that Airlink’s claims are limited to distributions from the Receivership and only as a concurrent creditor ie, without any preference.
Legal representatives for Airlink said: “...Airlink contends that its claims are Post-commencement Claims as defined in the (business rescue) Plan as the causes of action in respect thereof arose after the commencement date of 5 December 2019 in that such claims became due and payable only after that date...” Accordingly, Airlink is seeking a court decision as to whether SAA remains liable to pay these claims and, if so, whether that liability is limited.
SAA has not commented publicly on the matter.
A court date had not been confirmed at the time of writing.
Source: Travel News / Reporter Sarah Cornwell
