South African private-sector airline company Airlink has stated that it respects, but is disappointed by, the decision of the South Gauteng High Court not to interdict the Thursday meeting of creditors of State-owned South African Airways (SAA), which is currently under business rescue. The purpose of the meeting is to allow SAA’s creditors to vote to accept or reject the business rescue plan proposed for the State-owned national flag carrier.

“We had sought to interdict the meeting and to have the SAA business rescue process stopped on the basis that the proposed rescue plan is implausible, treats creditors unequally, is opaque in explaining how it will be funded and that it is not the product of a truly independent business rescue process,” explained Airlink CEO and MD Rodger Foster. “Although the government has recently restated its commitment to SAA, we were left with no alternative but to take legal action, having been frustrated by the business rescue practitioners and their resistance to comply with the provisions of the Companies Act. Given these factors, we fail to understand how creditors can be expected to make an informed decision when asked to vote on the plan at [today’s] meeting. We cannot reconcile that the process to date is what is anticipated in the Companies Act.”

Consequently, Airlink will vote against the implementation of the current business rescue plan for SAA, unless it receives answers to a series of questions that it has raised. It will also seek to persuade SAA’s business rescue practitioners to return to their original, Companies Act-defined, mandate. This would mean that they would draw up a business rescue plan that would benefit all creditors, and not give preference to some creditors and the shareholder (the government) over the others.

In its statement, Airlink also notes legal opinions published in the media, which put question marks over the legality and fairness of the creditors voting process regarding the business rescue plan. In particular, holders of unused SAA tickets, bought before the start of the business rescue process (that is, before December 6 last year) have not been recognised as SAA creditors and so are not permitted to vote; while, on the other hand, lenders have been granted secured creditor status, even though their loans are government-guaranteed.

Airlink is a regional and business feeder airline, with Level 4 broad-based black economic empowerment status. It operates 55 routes and serves 39 destinations across nine African countries and has the biggest commercial jetliner fleet in Southern Africa. It used to have a franchise agreement with SAA but now operates independently under its own 4Z flight code. Its on-time performance is better than 95% and it operated more than 63 000 flights, carrying nearly 2-million passengers, last year.