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Johannesburg - SA Express on Friday announced that it would be launching flights on three routes where Airlink had up to now enjoyed a monopoly:
• Cape Town to George;
• Johannesburg to Nelspruit and
• Johannesburg to Pietermaritzburg
This will obviously hurt Airlink financially, as they have up to now been enjoying monopoly profits on the routes and will from November have to compete with SA Express to win passengers over.
Airlink are clearly not happy about this: “While Airlink welcomes competition on any of its routes on a fair and equal basis, we feel strongly about being taken on by a technically insolvent state-owned airline using the taxpayers' money to compete with us unequally.
Audit report
"Airlink is in its own right a taxpayer, contributing more than R400m in taxes (VAT, PAYE, and Corporate Tax) annually to the fiscus and it is ironic that the state sees it fit to use taxpayers' funds to compete with its bona fide taxpayers,” the company said in a statement.
SA Express earlier reported an operating loss of R25m (but also an accounting profit of R1m), and an indication of the state of its accounts is given by the fact that the “current year net asset value is not available" and the “the company is still working hard to improve the audit report.”
Airlink also note that “the SAX flights will operate using intellectual property owned by SAA, which places SAA in breach of its agreements with Airlink”.
The report said it seemed as if SAA might be running into issues with the only other major private provider of scheduled flights in South Africa (they are currently opposing Comair’s challenge of the granting of the R5bn guarantee by the government ).
Families
Airlink went on to say that “the state owns a small stake in Airlink (3% held by SAA), with the balance of Airlink’s shares being privately held.
"Airlink is 32.5% broad-based black owned with the beneficiaries of this ownership being more than 300 000 black families.
"Airlink supports more than 1 000 families directly, with an additional 5 000 families being supported downstream.”
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. He tweets from @southafricaTO
• Cape Town to George;
• Johannesburg to Nelspruit and
• Johannesburg to Pietermaritzburg
This will obviously hurt Airlink financially, as they have up to now been enjoying monopoly profits on the routes and will from November have to compete with SA Express to win passengers over.
Airlink are clearly not happy about this: “While Airlink welcomes competition on any of its routes on a fair and equal basis, we feel strongly about being taken on by a technically insolvent state-owned airline using the taxpayers' money to compete with us unequally.
Audit report
"Airlink is in its own right a taxpayer, contributing more than R400m in taxes (VAT, PAYE, and Corporate Tax) annually to the fiscus and it is ironic that the state sees it fit to use taxpayers' funds to compete with its bona fide taxpayers,” the company said in a statement.
SA Express earlier reported an operating loss of R25m (but also an accounting profit of R1m), and an indication of the state of its accounts is given by the fact that the “current year net asset value is not available" and the “the company is still working hard to improve the audit report.”
Airlink also note that “the SAX flights will operate using intellectual property owned by SAA, which places SAA in breach of its agreements with Airlink”.
The report said it seemed as if SAA might be running into issues with the only other major private provider of scheduled flights in South Africa (they are currently opposing Comair’s challenge of the granting of the R5bn guarantee by the government ).
Families
Airlink went on to say that “the state owns a small stake in Airlink (3% held by SAA), with the balance of Airlink’s shares being privately held.
"Airlink is 32.5% broad-based black owned with the beneficiaries of this ownership being more than 300 000 black families.
"Airlink supports more than 1 000 families directly, with an additional 5 000 families being supported downstream.”
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. He tweets from @southafricaTO
