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SAA settles with SunAir liquidators

Published Aug 28, 2005


By Santosh Beharie

Years of legal wrangling between South African Airways and a minor but now defunct rival, SunAir, ended in a R14-million payout by the national airline this week.

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The settlement raises the question of whether SunAir's liquidators will now go after Coleman Andrews, the controversial former chief executive of the national carrier. He was second defendant in the suit.

Louisa Zondo, the legal counsel for SAA, said that the airline had paid R14,25-million in full and final settlement of the liquidators' claims without admission of liability on the part of SAA.

"We believe that this is an amicable conclusion to this matter," Zondo said on Saturday.

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The action in the Johannesburg High court alleged that SAA and top executives, including Andrews, his deputy André Viljoen and Johannes van Jaarsveld, the executive vice-president for operations, had plotted to seize control of struggling SunAir and then deliberately shut it down.

The initial claim against SAA by the liquidators was for R97-million.

The liquidators, Norman Simon, John Fourie, Brian Cooper and Welcome Jacobs, said in court papers that the money could have been raised by selling the collapsed airline's assets. This had not been done because SAA deliberately blocked the sale after it took control in 1999.

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Despite the settlement, it is understood that SAA has agreed not to co-operate with Andrews in defending any future claims by the liquidators against him.

Andrews left the airline after about 30 months, with a much-reported payout of R232-million, claiming to have turned SAA around. But when his reported profit of R350-million that year was scrutinised, it was found to have included the sale of several aircraft.

SunAir, which operated between Johannesburg and Cape Town, was liquidated last year. It was the second time SunAir had gone belly up. The first time was in 1999 when it was run by British Airways Comair. At that stage SAA wanted to buy a 75 percent stake in the airline, with 25 percent remaining with BA Comair. However, SAA withdrew its offer and SunAir folded.

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In March 2002, it was revived with two aircraft and two flights daily between Johannesburg and Cape Town.

The new SunAir catered for business executives and operated from the much quieter Lanseria airport, north of Johannesburg, as opposed to Johannesburg International Airport in Kempton Park. SunAir's trademark was the red leather seats on its DC 9-32 planes.

The liquidation was reportedly "devastating" for the airline's 40 employees.

Johannesburg businessman Robert Watson, to whom one of the empowerment shareholders of SunAir ceded its claims against SAA, is separately suing the national airline for R178-million. - Additional reporting by Sapa

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