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SAA secures guarantees

Feb 14 2012 12:13
James-Brent Styan

Cape Town. – South African Airways (SAA) has managed to secure a guarantee from a private bank for R437m to cover its air service licence guarantees.

SAA chief financial officer Wolf Meyer said the National Treasury earlier refused the airline permission to use an existing government guarantee of R1.6bn to cover its air service licence responsibilities. This was the previous arrangement.

The liability deriving from SAA’s air service licences pertains to tickets that have been presold by the airline.

In 2011 SAA received an unqualified audit report; however, there was an emphasis of matter placed on the air service licence guarantees.

“If the airline goes belly-up for instance, there has to be a guarantee that the airline can refund the tickets”, Meyer said.

The airline appeared before the parliamentary committee on public enterprises on Tuesday morning.

Meyer said SAA has managed to secure the necessary guarantees through a financial institution.

“This pertains to both the R101m guarantee for domestic flights as well as the R336m needed to cover international air service licence guarantees.”

Meyer also said SAA has managed to settle most of its competition-related legal challenges.

“There’s only one outstanding matter, relating to Comair, that remains. All other antitrust matters have been settled.”



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