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Velvet Sky awaits court verdict

Mar 05 2012 11:23 Sapa

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Johannesburg - Velvet Sky's future will depend on the outcome of BP's application to have the low-cost airline provisionally liquidated, chief operating officer Gary Webb said on Monday.

"It's going to depend on this BP motion... so we are awaiting that judgment to see what the next move is, but we are hoping for a positive outcome," he said.

On February 24, BP Southern applied to the Pietermaritzburg High Court for the provisional liquidation of the airline, which allegedly owes BP R29m for aviation fuel.

The airline was given until Monday, March 5 to file court papers in response to BP's application. The court would hear arguments from both parties on Wednesday.

BP said Velvet Sky had breached its undertaking to pay arrears by February 17, and had not kept up to date with current payments for aviation fuel.

Webb said there were three possible outcomes to the court application - a postponement, a denial of the application, or the granting of the application. When asked if the airline would be able to afford to resume flights, Webb said: "As soon as that motion disappears then our cash becomes available."

The day before the first court hearing, Velvet Sky cancelled all flights. Webb at the time said this was due to a dispute with a service provider, as they were in the process of changing service providers, but this was not concluded in time to operate.

Last Monday, the airline announced all flights would be suspended. Flights remained suspended on Monday.

"The suspension will allow the company time to reconstitute its board and balance sheet, and realign its short-term strategy. It will also allow the company time to properly resolve disputes with certain suppliers," the company said in a statement at the time.

Velvet Sky said customers holding reservations for dates during the suspension could change their bookings to a later date, or apply for a refund.

The broad-based black economic empowerment company is based in Durban and flies between that city, Johannesburg, and Cape Town.

 
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