A row has erupted over plans by South African Airways (SAA) to close down Sun Air, shortly after having agreed to acquire a controlling 75% stake in its domestic competitor.
At the end of August, SAA apparently gained control of Sun Air and promptly announced plans to wind it up. "There just wasn't room for four airlines in our domestic market," says SAA chief executive Coleman Andrews.
SAA set about transferring staff and returning the 11-aircraft fleet. But a row subsequently broke out as the South African Government announced that it had not yet sanctioned the liquidation deal, nor affirmed the share swap, which it says it was entitled to do as a condition of Sun Air's privatisation two years ago. Controversy has also escalated over an outstanding R20 million ($3.3 million) owed to the state by its shareholders following the privatisation. The debt is due to be paid by February next year.
The planned liquidation has been welcomed by Sun Air's other rivals on the trunk routes between Johannesburg, Durban and Cape Town. British Airways franchise partner Comair, which owned 25% of Sun Air, expects to gain around a quarter of the airline's passenger traffic, boosting its share from 18% to just over 20%. Nationwide hopes to pick up about 10% of Sun Air's passengers, taking its share on the routes up to 7%.
Source: Airline Business
