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Although disappointed by the ruling, Airlink says he will study the ruling and consider his options. (Supplied)
- The Supreme Court of Appeals has dismissed an attempt by Airlink to access R510 million in ticket sales collected by SAA on its behalf.
- The issue in court was whether the money, paid to SAA before it was placed in business bailout in early December 2019, should be turned over to Airlink.
- In Airlink’s view, the proceeds were only being temporarily held and managed by SAA. But the airline’s business rescue professionals viewed the money as a debt owed to Airlink, incurred by SAA before entering the business rescue.
The Supreme Court of Appeals dismissed an attempt by private airline Airlink to gain access to R510 million in ticket sales that state airline SAA had collected on its behalf before it entered a commercial bailout.
In Airlink’s view, this income had always “belonged” to him and was temporarily held and managed by SAA. SAA’s business rescue professionals, on the other hand, viewed the money as debt owed to Airlink, incurred by SAA prior to entering the business rescue. In terms of SAA’s rescue plan, Airlink can receive, at most, 7.5c in the rand of what is owed to him.
The question before the court was whether the money, paid to SAA before it was put into business bailout on December 5, 2019, should be turned over to Airlink.
Airlink is an independent and privately owned South African airline, operating regional flights in the country and the southern African region.
The Gauteng High Court in Johannesburg had previously dismissed Airlink’s initial application, so he appealed to the Supreme Court of Appeal.
But the appeals court determined that the funds raised by SAA on Airlink’s behalf were a debt to Airlink and not “property” of Airlink. The appeal was dismissed because the business bailout effectively prevented any legal action against SAA.
Under a 23-year franchise agreement between the two airlines that existed in 2019, Airlink tickets were sold and issued through the SAA computer reservation system and SAA was required to collect and temporarily hold the funds and pay for them. to Airlink in monthly installments for those tickets flown in the previous month. Airlink, in turn, paid SAA for the services rendered.
SAA defaulted on funds for tickets flown in November 2019 but owed in December. In Airlink’s view, the funds raised by SAA on his behalf were never for SAA to keep or spend.
“Shortly after entering the business bailout, SAA made clear that it would not honor the terms of its agreement with Airlink. This led Airlink to terminate the franchise and rebuild its business independently of SAA,” Airlink said in a statement issued Tuesday. as a reaction. to the decision of the court of appeal.
“However, SAA has been able to hide behind the legal veil of the business rescue, to retain and consume Airlink’s money, even though it did not have a legitimate business or transactional basis to do so. Unlike other business creditors SAA owes them money for goods supplied or services rendered, Airlink’s claim relates to funds collected on their behalf by SAA for the services Airlink provided to its own customers. “
The Gauteng High Court had previously rejected Airlink’s argument that SAA acted as its agency. It found no evidence to support the claim that the funds belonged to Airlink and were held by SAA on behalf of Airlink. The court concluded that the relationship between the two airlines was rather that of debtor and creditor, and that Airlink had not presented any case for the lifting of the moratorium imposed in terms of the act concerning legal proceedings against companies subjected to business bailout.
The appeal court determined that the general moratorium on legal procedures imposed in terms of the law becomes applicable immediately at the beginning of the business rescue and lasts until the business rescue ceases and that the moratorium is necessary for the effectiveness of the business rescue procedure .
The SCA also concluded that the Gauteng High Court had correctly held that SAA was not required to deposit the proceeds received in connection with the sale of Airlink tickets in a separate bank account and hold them in trust as the property of or on behalf of Airlink. .
Although disappointed by the sentence, Airlink said Tuesday that he would study the sentence and consider his options. It is in the process of launching and resuming flights on a number of new and re-established national and regional routes in southern Africa. It has also entered into commercial agreements with international airlines such as Qatar Airways, Emirates, Air France-KLM, British Airways and United.
The SAA rescue practitioners replied that they had taken note of the Supreme Court of Appeals ruling.
