(5 minutes read)
· The South African Supreme Court of Appeal dismissed an appeal by Airlink, a privately owned airline, to get access to R510 million in ticket sales that state-owned airline SAA had collected on its behalf before it was referred to business rescue team
· The Airlink argued that revenue had always belonged to it and SAA was temporarily being assigned the task of managing the funds. However, SAA’s business rescue practitioners claimed the money as a debt owed to Airlink before SAA went into business rescue
· The SCA while agreeing with the decision of the Gauteng High Court had maintained the same that SAA had no obligation to deposit the revenue received in respect of Airlink ticket sales in a separate bank account and to hold it in trust as Airlink’s property or on its behalf
The South African Supreme Court of Appeal dismissed an appeal by Airlink, a privately owned airline, to get access to R510 million in ticket sales that state-owned airline SAA had collected on its behalf before it was referred to the business rescue team.
The Airlink argued that revenue had always belonged to it and SAA was temporarily being assigned the task of managing the funds. However, SAA’s business rescue practitioners claimed the money as a debt owed to Airlink before SAA went into business rescue. SAA’s rescue plan spells out that Airlink stands to receive only 7.5c in the rand of what is owed to it. The court was to decide whether the money, paid to SAA prior to the business rescue on 5 December 2019, should be released to Airlink.
Airlink, a privately-owned South African airline operates regional flights in the country and Southern African region. Previously, the Gauteng High Court in Johannesburg had dismissed Airlink’s initial application. Therefore, the appeal was filed with the Supreme Court of Appeal with the prayer to set aside the lower court’s decision.
But the appeals court found that the funds collected by SAA on behalf of Airlink was a debt owed to Airlink and not Airlink’s “property”. The appeal was dismissed due to business rescue effectively prevented any legal action against SAA.
The SCA also found that the Gauteng High Court had maintained the same that SAA had no obligation to deposit the revenue received in respect of Airlink ticket sales in a separate bank account and to hold it in trust as Airlink’s property or on its behalf.
Airlink said it would study the judgment before considering other options. In the meanwhile, the aggrieved airline is in the process of launching and resuming flights to domestic and regional routes across Southern Africa. The airline has also entered into commercial agreements with international airlines like Qatar Airways, Emirates, Air France-KLM, British Airways and United Airlines.
