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Privately-owned domestic airline Airlink announced on Thursday that it has "redefined" its partnership with South African Airways and will operate under its own "4Z" flight code from June 11 this year.
Should SAA's circumstances "worsen", Airlink said in a statement that it will activate the transition to its own share code "immediately if necessary".
Airlink's existing franchise agreement with SAA will also be replaced with "a new commercial arrangement", Airlink said in a statement.
"While we intend working with SAA's business rescue practitioners to find a solution that enables SAA to continue playing its important role in the Southern African market, we have a responsibility to take action to preserve Airlink's viability as a financially robust, independent and privately-owned airline," commented Airlink CEO and managing director Rodger Foster.
Foster told Fin24 that Airlink has already been working with SAA for a number of years to see how it can adjust the franchise agreement "to ensure Airlink's survival given SAA's precarious financial situation". The franchise agreement dates from 23 years ago.
He added that it is purely coincidental that Airlink's announcement comes on the same day as increased media reports on SAA's dire financial situation. The national carrier was placed into business rescue in December.
As Fin24 reported earlier on Thursday, the flag carrier has not yet received R2bn in funding from Treasury to help finance its business rescue process. A spokesperson for the business rescue practitioners told Fin24 on Thursday that liquidating the airline was not yet on the cards.
"Government continues to indicate its support for the business rescue process and together we are considering various scenarios to keep the entity operational. We remain hopeful that a mechanism can be found to unlock the liquidity constraints. The liquidation of SAA is not one such current scenario," SAA's business rescue practitioners said on Thursday.
We're still aligned with SAA
Foster said Airlink remains "aligned with SAA" and was "working with all the stakeholders to ensure SAA's ability to survive".
"We are comfortable that the SAA business rescue practitioners are doing their best to ensure the necessary funding materialise," he said.
In terms of the current franchise, flights operated by Airlink carry the "SA8" flight designator. Under the new commercial arrangement, they will operate as Airlink's unique "4Z" code.
Customers holding SAA 083 code tickets for flights after June 10, who do not want to be re-accommodated, may apply to SAA for a refund or through other channels, such as the credit card issuer used for payment or insurance. SAA refunds will be managed in line with its business rescue policies.
According to Foster, the new agreement will enable a seamless transition with a minimum inconvenience to customers. "While SAA remains an important strategic pillar in Airlink's strategy, the new arrangement gives Airlink the freedom to extend its commercial reach, develop more routes and frequencies on an independent basis and extend or establish additional agreements with other leading international airlines," said Foster.
