Comair Limited has announced the launch of a High Court legal challenge to the R5 billion government guarantee to South African Airways. 
Official government policy and legislation are in place that govern the operation of SAA as a state-owned entity and its competitive relationship with the rest of the aviation industry. Comair states that the current and previous bailouts, which now amount to over R11 billion, do not comply with either the Domestic Aviation Transport Policy or the law (the Constitution, the SAA Act, the Promotion of Administrative Justice Act and the Public Finances Management Act). 
“We regret that we have had to resort to legal action to achieve compliance and have not done so lightly. However, we have no other recourse,” says Comair CEO, Erik Venter. 
According to Venter this action by Comair is not a challenge to stop all funding of SAA, nor is it a proposal to privatise or challenge the shareholding of SAA, nor an attempt to shut down SAA. It is an action to ensure that government will provide funding to SAA only after consultation with all affected stakeholders (as per the Promotion of Administrative Justice Act) and that any funding is in accordance with government’s Domestic Aviation Transport Policy.
Venter says: “Comair’s sole objective is to attain a level playing field in the domestic aviation market to ensure that all airlines face the same risks and the same requirements to operate on sound commercial principles. By receiving government bailouts SAA avoids this commercial reality and this negatively impacts on all current and potential airline operators.
“Comair appreciates last week’s announcement of an SAA turnaround strategy, however has concern that there have already been eight prior plans, and that this one has a 20-year time horizon.  This is unacceptable in an industry where private capital competes with a state-owned enterprise. Comair cannot afford to see this plan unfold over another 20 years.  A 20-year plan would furthermore absolve anyone of ultimate responsibility to deliver the entire plan,” says Venter. 
This High Court action is separate from previous legal challenges by Comair and other competitors, some of which are still active.