Questions have arisen again around South African Airways’ (SAA) ability to turn its financial fortunes around after it was ordered by the Supreme Court of Appeal (SCA) to pay R1.1 billion to competitor Comair on Friday.
Comair, which won its 14-year legal battle against South African Airways (SAA) around alleged anti-competitive behaviour by SAA, is now focused on achieving financial sustainability, with business papers reporting that the airline’s shares rose up to 37% following its victory against the national carrier.
Yet many analysts see this as another massive financial blow SAA can ill afford. The SCA said in its judgement that the national carrier had embarked on an “unnecessary legal battle” which had only served to maximise its risk exposure.
SAA spokesperson Tlali Tlali admitted in an interview with business daily Moneyweb that the battle with Comair “could have and should have” been handled differently but he was adamant that the airline’s turnaround strategy was “on track”.
“The finalisation of this case marks the conclusion of one of the disappointing legacy matters that dragged on for far too long and was overdue. The current airline leadership at board and executive management level is committed to closing all legacy issues and to start on a clean slate,” said Tlali in a statement over the weekend.
“The finalisation of this matter is a deliberate decision of SAA to clean up and focus on transforming the airline as it undertakes the journey towards financial sustainability. The airline must execute its strategy without being distracted by legacy issues in order to reach a break-even point by the end of financial year end 2021,” he added.
