The price of the shares of the aviation group listed on JSE, Comair Limited, shot up by more than 20% at the close of trading on Friday, after it announced it would obtain R1.1 billion from the state SAA. This follows a conciliation agreement reached in an anti-competitive case that goes back to 14 years.
It is an important windfall for Comair, which operates kulula.com and British Airways in SA, but represents a new financial hit for SAA with cash problems.
Comair informed the shareholders of the agreement with SAA in a statement by Sens, which is related to a claim for damages presented by Comair against SAA with respect to the anti-competitive incentive schemes of the travel agents of the national airline.
Read: Comair expects to obtain R1.1bn SAA compensation for damages
In the Sens statement, Comair said it was pleased to inform shareholders that it has entered into a final and total liquidation agreement with SAA. The conciliation agreement was issued by the Supreme Court of Appeal (SCA) by court order.
"In terms of the Liquidation Agreement, SAA will pay Comair a settlement amount of R1,108,040,000 plus interest. "The amount of the settlement will be made in accordance with a payment schedule that will begin on February 28, 2019 and end on July 28, 2022, or sooner, if SAA chooses to make the payments earlier than agreed," he said.
In addition, SAA will pay the legal costs charged to Comair incurred to date. Both Comair and SAA will withdraw the appeal and the cross appeal currently pending before the SCA.
The SAA agreement with Comair follows the ruling of the Superior Court of Gauteng Sur in favor of Comair in its claim for damages in February 2017.
SAA spokesman Tlali Tlali has yet to answer Moneyweb's questions and Comair declined to comment.
Although the agreement concludes with the 14-year dispute, it represents a double financial blow for Comair within six months. In October, Comair announced that it would stop giving SAA Technical millions of rand in the aircraft maintenance business due to the poor service of SAA. He planned to move his aircraft maintenance offshore and partner with Lufthansa.