Airlink, announced yesterday that it had replaced its franchise agreement with troubled SAA with a new commercial deal. Picture: Supplied.
DURBAN - Africa's largest privately-owned airline, Airlink, announced yesterday that it had replaced its franchise agreement with troubled SAA with a new commercial deal as it seeks to fortify its business.

This is amidst speculation that the state-owned airline is facing imminent liquidation in the absence of the promised Treasury funding to keep its operations going.

Airlink will operate under its own “4Z” flight code on services operated as from June 11. Currently Airlink uses SAA’s code “SA8”, but it will change to “4Z” in June.

Rodger Foster, a chief executive and managing director at Airlink, said: “While we intend working with SAA’s business rescue practitioners to find a solution that enables SAA to continue playing its important role in the Southern African market, we have a responsibility to take action to preserve Airlink’s viability as a financially-robust, independent and privately-owned airline.

“However, should SAA’s circumstance worsen, then Airlink will activate the transition sooner, immediately, if necessary.”

Foster said Airlink planned to propagate its business and take advantage of new market opportunities.

“At the same time, we will be able to strengthen our vital partnership with SAA,” Foster said.

Airlink said customers holding SAA 083 tickets for flights after June 10 and who did not want to be re-accommodated, could apply to SAA for a refund or through other channels, such as the credit card issuer used for payment or insurance and SAA refunds would be managed in line with its business rescue policies.

SAA was expecting to hear from the government this weekend when R2billion is expected to be paid to keep operations going. Finance Minister Tito Mboweni said yesterday that the National Treasury was still trying to find additional funding for SAA.

Airlink, announced yesterday that it had replaced its franchise agreement with troubled SAA with a new commercial deal. Picture: Sumaya Hisham/Reuters


Yesterday, Louise Brugman, a spokesperson for business-rescue practitioners Les Matuson, said that the government continued to indicate support for the business-rescue process and "together we were considering various scenarios to keep the entity operational", according to Bloomberg.

“We remain hopeful that a mechanism can be found to unlock the liquidity constraints,” Brugman said.

Meanwhile the South African Transport and Allied Workers' Union has lashed out at the government after the Treasury failed to provide R2bn in funding to save SAA.

The union said the government never intended to save SAA in the first place after it was placed under business rescue last month.

“SAA has now put up nine of its aircraft for sale. Eight fly regularly to major destinations around the world. Judging by its actions, the government never intended to save SAA. In an economy where the unemployment rate is the highest it has been in 11 years, the government is gambling with 10000 SAA jobs,” the union said.

BUSINESS REPORT