The news sent Comair shares roaring, rising more that 20percent on the JSE, with the low-cost airline celebrating the end of the multi-year litigation against SAA.
Comair accused the national carrier of introducing an anti-competitive travel agent scheme that was designed to keep travel agents loyal to SAA.
It said SAA paid travel agents to divert customers to its flights in a scheme that ran from 2001 to about 2006.
In 2017, the South Gauteng High Court ruled that SAA had to pay Comair R1.16bn, but the national carrier appealed the decision in the Supreme Court of Appeal (SCA).
The SCA ruled that the high court was correct in awarding the damages to Comair. However, SAA appealed that the amount be reduced to around R300million.
Comair then launched a cross- appeal, demanding R800m plus interest.
In terms of the new agreement, SAA will foot the bill for Comair’s taxed legal costs incurred to date. “In terms of the settlement agreement, SAA will pay Comair a settlement amount of R1.1bn plus interest,” SAA said.
“The settlement amount will be made in accordance with a payment schedule commencing on February 28, 2019 and terminating on July 28, 2022, or earlier should SAA elect to make payments earlier than agreed.”
SAA and Comair have enjoyed frosty relations in the past. Last year, Comair’s chief executive Erik Venter blamed SAA Technical for his airline’s widely reported departing time delays. Venter went on to detail plans to team up with Lufthansa to create a competitor to SAA Technical.
SAA spokesperson Tlali Tlali said the dispute could have been handled differently.
“This case was one of the unnecessary and yet protracted legal battles, which only served to maximise risk exposure for the airline,” Tlali said.
“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.”
In November, SAA told Parliament that it needed R21.7bn to stay in the air. SAA said it expected to record a loss of R5.2bn in 2019 and a further R1.9bn next year.
The Department of Public Enterprises’ last SAA audit for 2017/18 is yet to be finalised on a going-concern basis. However, the department said last week that funding options had been explored and an announcement was expected soon.
Finance Minister Tito Mboweni is expected to provide details on how the government plans to assist ailing state-owned enterprises, particularly Eskom.
Comair shares closed 21.98percent higher on the JSE on Friday at R5.55.