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Johannesburg - Comair's legal challenge against the South African government's bailouts of state carrier South African Airways (SAA) is due to start this week.
The case will be heard in the Gauteng North High Court in Pretoria from May 5 - 7, according to the Free Market Foundation (FMF).
Private airline Comair, which is a franchise partner for British Airways and also operates the low-cost airline brand kulula.com, launched the court challenge in February 2013 following the government's bailout then of R5bn.
In October 2012 the government granted SAA a R5bn guarantee for a period of two years. SAA told parliament in February 2012 it needed between R4bn and R6bn for a recapitalisation programme. One of the conditions for the R5bn guarantee in 2012 was that SAA's board had to develop a turnaround strategy.
In October 2014 SAA was again seeking government support, two years after it was granted the R5bn in loan guarantees.
In January 2015 Finance Minister Nhlanhla Nene announced that SAA will receive another R6.5bn injection from state coffers. This was after he said in his mini budget in October 2014 that SAA will not be bailed out and instead be restructured to become financially sustainable.
READ: Treasury approves R6.5bn loan for SAA
According to Comair CEO Erik Venter the court case was launched because the airline regarded the bailouts and certain other government payments to SAA as not compliant with the Domestic Aviation Transport Policy or the law.
He told Business Report at the time Comair's sole objective was to attain a level playing field in the domestic aviation market to ensure that all airlines face the same risks and the same requirements to operate on sound commercial principles.
Venter said then that Comair is not seeking to stop all financial support of SAA or to shut or privatise the airline, but was asking that any assistance be in line with domestic transport policy to minimise the impact on other operators.
READ: Comair court challenge over SAA bailout
"Comair seeks to challenge the constitutionality of government bailouts to a state owned airline competing with private operators in South Africa’s domestic aviation sector," explained FMF in a statement on Monday.
"The basis of the challenge is that current and previous bailouts do not comply with either the Domestic Aviation Transport Policy, the Constitution, the Public Finances Management Act (Paja), the Promotion of Administration Act or the SAA Act."
According to the FMF Comair wants the government only to provide funding to SAA after consultation with affected stakeholders, as required by Paja.
It also wants any funding to be in accordance with government’s Domestic Aviation Transport Policy
Lastly, Comair wants a level playing field for the domestic aviation in SA to be created.
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