Johannesburg – South African Airways (SAA) chairperson Dudu Myeni must go, that was the word from the Democratic Alliance (DA) on Wednesday after the South Gauteng High Court ordered the airline to pay Comair a R1.16 billion fine for anti-competitive behaviour.
The South Gauteng High Court on Wednesday awarded Comair a R1.16 billion settlement in its case against SAA in respect of its travel agent incentive schemes, which was found to be anti-competitive.
Comair had accused SAA 14 years ago of implementing an incentive scheme to travel agents that kept the agents loyal to the state-owned airline and excluded competitors, a violation of the Competition Act.
In terms of the judgement, SAA was ordered to pay Comair R554 million plus interest at 15.5 percent, and costs amounting to about R1.16 billion.
DA spokesperson on finance, Alf Lees, said the R1.16 billion that SAA was ordered to pay is money that could have been spent on skills development for the youth who do not have the skills to enter the job market. Lees said the ruling reinforced the DA's long-held view that Myeni was not fit to be the chairperson of SAA or any other board, and that her reappointment as the SAA chair was completely irrational.
"The Minister of Finance can no longer procrastinate, it is now time that he remove Myeni from the board of SAA. Minister Gordhan must now also announce that SAA will be privatised," Lees said.
"This R1.16 billion financial blow to SAA means makes it highly unlikely that the current state guarantees will be enough to enable SAA to both pay the massive award to Comair and to keep the airline afloat and the airplanes in the sky."
Lees said the DA would ensure that this R1.16 million blow to SAA is fully interrogated at the scheduled meeting of the Standing Committee on Finance on March 29.
"We will insist that interim financial statements for the 2016/17 year, at very least to the 28th of February 2017, are tabled at the committee meeting on the 29th of March 2017," Lees said.
"Everything possible must be done to avoid the consequent jobs bloodbath that would be a part of a likely recession that a downgrade to below investment grade would trigger."
Though SAA said it would not debate any merits of the case in the media, spokesperson Tlali Tlali said this was one of the legacy matters, dating back to the period between 1999 and 2005 and implemented by the then management team.
"The current management is focused on turning the business around to ensure that SAA is commercially viable, operationally competitive and financially self-reliant in the shortest time possible," he said.
"A number of interventions will be implemented and others have already been initiated aimed at ensuring positive business improvements take place in a matter of months."
SAA has already suffered losses of R4.7 billion in 2014/2015 financial year, and a further R1.8 billion in the past financial year.