Comair shares fly after more than R1bn settlement from SAA
The low-cost airline will receive R1.1bn, along with legal costs, after winning its 14-year battle over SAA's anti-competitive conduct
Shares in Comair, the only JSE-listed aviation company, rocketed as much as 37% to R6.25 on Friday after it said it would receive a settlement from SAA worth a little less than half of its market capitalisation.
Years of legal battles have now ended, and the parties have entered into a full and final agreement over SAA's anticompetitive conduct between 1999 and 2005, Comair said on Friday.
SAA has agreed to pay the British Airways franchisee R1.1bn, plus interest, along with legal costs. By 4.21pm, Comair's share price had pared gains to 19.34% at R5.43, giving the airline a market capitalisation of R2.548bn.
The airline had lodged civil claims based on a 2006 competition appeals court ruling that SAA had engaged in anticompetitive behaviour by paying commissions to travel agents, in order to incentivise them to divert customers to SAA flights.
The civil litigation was the first based on a Competition Tribunal ruling.
The competition appeal court had ultimately concluded that SAA could show no reason the scheme, which saw SAA capture high-value customers and grow its revenue by a threefold differential over competitors, might drive technological innovation in the sector.