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Comair hopes to up R1.1bn SAA damages award

Video: Take control of a Boeing 737-800.

Comair CEO Erik Venter has disclosed that its R1.16 billion damages award against SAA might increase by R700 million, should a court appeal succeed.

Venter spoke to Moneyweb at an event showcasing the Comair Training Centre (CTC) in Kempton Park where the airline’s own pilots as well as those of 32 other airlines and the South African and Indian air forces are trained.

In terms of a High Court ruling handed down in February last year, SAA has to pay Comair damages to the amount of R1.16 billion for anticompetitive conduct between 1999 and 2005.

SAA earlier paid R104 million damages to Nationwide on the basis of the same events, but decided to appeal the amount awarded to Comair. The court in both cases only dealt with the amount of damages, since the Competition Tribunal earlier ruled on the merits.

Venter said SAA’s appeal was most probably a delaying tactic. “We would have been satisfied with the R1.1 billion, although it’s R700 million less than what we claimed.” He said that when SAA appealed, Comair decided to cross-appeal in an effort to pursue the R700 million balance as well.

Both parties got leave to appeal and are awaiting a court date.

National Treasury recently had to step in and pay R2.2 billion to one of SAA’s creditors that refused to extend the term of its loan to SAA when it became due. SAA has R19 billion worth of government guarantees and it is said to make a R370 million loss every month.

Comair earlier challenged government’s ever-increasing guarantees to SAA in court but without success. Venter said on Wednesday that the government, at that stage, argued that the guarantees were not in reality an expense to the fiscus. It is “merely paper”, so to speak.

When Treasury had to intervene with the R2.2 billion payment, this changed fundamentally, he said. Government used cash to prop up SAA and that is money that could have been used for building houses, schools and so forth.

Asked how long SAA can continue operating, he said: “As long as government keeps on giving the money.”

Venter said the current aviation market is tough, but cost cutting and diversification has paid off for Comair.

When Comair about 15 years ago started to do its own pilot training, it was aimed at saving the cost of sending staff abroad for training. Initially it was a cost centre, but the airline expanded the centre and is currently providing training to more than 32 airlines, the South African Air Force and the Indian Air Force.

“The facility operates four flight simulators for various configurations of Boeing 737, the best-selling commercial jet airliner in history. We’ve built a client base of airlines from African countries, as well as the Middle East, South America, Indo-Asia and the Far East, offering advanced pilot training for both airline operators and private clients,” Venter says.

Training is specific to the 737 series aircraft, while classroom training non-specific to the 737 series is also provided at the centre. This includes crew resource management courses as well as command evaluation and upgrade training.

Comair has also set up a retired Boeing 737 for cabin crew training, providing a realistic environment for safety and evacuation training. The aircraft is equipped with bulkheads and stowages, smoke simulators, communication systems, passenger and crew seats, doors and slides, galleys and a flight deck.

To see how this retired aircraft was moved over the highway to its current location, watch the video below:

The CTC diversification model has been followed with regard to Comair’s airline catering unit Food Directions and its Slow Lounge concept.

Venter said the prospects for the CTC are good. Boeing’s recent Current Market Outlook (CMO) report has found that air traffic for Africa’s carriers is forecast to grow at nearly 6% annually over the next 20 years, which is above the world average, he said. It is driven by economic growth on the continent and by increasing numbers of travellers from and within the region.

Boeing projects that the aviation sector in Africa will need 20 000 new pilots, 24 000 new technicians and 26 000 new cabin crew by 2035. This reflects a global demand for 617 000 new pilots, 679 000 new technicians and 814 000 new cabin crew for the same period.

Watch: Moneyweb journalist “takes control” of the Boeing 737-800

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That was done very well – thanks.

Well done Comair. And if SAA make the usual claim that they have no money to pay you what was awarded, then attach every asset of their that you can. Then send a letter of thanks to Dudu of her contribution to the mess she created at SAA.

My 2pence worth

Agree – spare a thought for Comair’s honest and hardworking entrepreneurs trying to earn a good living whilst offering a great service to SA’ns. They know there is no safety net . . . . .

On the other end – – SAA has a massive safety net – and incompetent people are retained – all at the whim of the great No 1

Antoinette. Every time I post anything on one of the articles you wrote my post gets held back for moderation. Have I been flagged for censorship perhaps?

I have the same problem @Sweetpea

I think a red flag comes up when I want to post anything – – – probably from (past) criticism of MWeb and (recent) criticism of their favourite business partners

Lets see how long this takes – if at all…

My goodness – – – seems Mweb Nanny Sensor App not working on me – or I have been cleared!!

My own experience is that ALL comments are held for moderation

Just compare the incredible initiative and sense of purpose that is exhibited by Comair, to …
…the absolute f..ng shambles that is SAA under “Vas aan die Doedoe” and her clueless cadres, sponsored unwillingly by the poor taxpayers.

Antoinette
You refuse/fail to publish my comment on Comair and SAA – who are you protecting?

I think you guys at MWeb should realise that there are people – like me – who can spend only a certain period of the day to read and comment. I then move on to other matters and it is always nice to get feedback from other readers – instantly – on what I posted.
Perhaps your Editor or Chief Vetting Officer should view and decide on comments with greater alacrity – and have the common courtesy to advise me that me comment is not suitable (and reasons given as well please)

The main reason for reading MWeb daily is to get some ‘interaction’ with other readers. Surely that’s your main reason as well?!?!

Hi Philip
We try to be as efficient as possible, but sometimes it takes a few minutes before our any flagged comments are moderated. Not all comments are flagged and the majority is published immediately. The comments that are flagged are those who contain one or more words that may be defamatory or racist. This does not mean that all such posts will be deleted, but we need to have a look at the post before a decision is made.
I will, however, try to accelerate this process.
Regards
Ryk

Totally agree, Illphil!

It really is the comments that make Moneyweb articles interesting and valuable by adding to what the authors are saying, or calling them out when they have got it plain wrong or, almost as bad, have downplayed or even ignored other pertinent information.

Many of the commenters on MW (OK, not me!) clearly have a lifetime of real experience in the financial industry and have accumulated real wisdom worth listening to (and sometimes quite obviously more so than some of the authors !).

So that has become my acid-test for the value of the advice in most MW articles: Do the commenters generally give it a thumbs up? Or not??

End of comments.

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