ABN – Comair Limited is challenging the validity of the South African government’s guarantee for South African Airways (SAA).
Following the signoff by two cabinet ministers SAA received a R5 billion (US$417.8 million) government guarantee.
Media reports have shown that the airline has received more than R30 billion in government guarantees over the last 16 years.
Comair has challenged this guarantee saying it compromises a level playing field.
Comair CEO Eric Venter told CNBC: “We are looking for a level playing field.
“It’s not much about the raising of finance but more about what you can afford to do commercially as a competitor when you have this unlimited pot of money and other players are constrained by the risk of bankruptcy.
“Most countries have a legislative framework to govern the competitive effect of state funding unlike South Africa where we rely on parliament to look at the factors around funding.
“What we are challenging is that SAA is being funded by guarantees signed by simply two ministers and is not going through parliament.”