In a retaliatory move, the US Department of Transportation (DOT) has tentatively denied South African Airways (SA, Johannesburg O.R. Tambo) the right to fly to co-terminal points in the United States after its South African counterpart refused to allow Delta Air Lines (DL, Atlanta Hartsfield Jackson) to stop in Cape Town on the return leg of its Atlanta Hartsfield Jackson-Johannesburg O.R. Tambo service due to restart on August 1.

This has emerged from a regulatory order dated June 15 in which the US DOT states it “strongly disagreed” with the South African Department of Transport’s (SADOT) decision and called it an incorrect unilateral reinterpretation of the bilateral air transport agreement between the two countries. It said its attempts to engage with the SADOT in order to reconcile the matter had been unsuccessful, but it would continue its efforts to resolve the matter. “Should the SADOT reconsider its position on co-terminalisation rights and honour its obligations under the agreement by granting Delta’s pending application, we will reconsider our tentative decision,” it stated.

South Africa’s DOT was not immediately available to comment.

The US DOT noted that SAA previously had co-terminal rights to the US, both for its own services and code-shares. This meant it could, for example, fly from Johannesburg to New York JFK and on to Los Angeles Int'l, although it never exercised this right in the past.

However, in light of the Delta situation, the US DOT now has tentatively denied SAA’s request for renewal of authority to serve Los Angeles, New York, Miami Int'l, Philadelphia Int'l, and Washington Dulles on a co-terminal basis.

Delta is set to make a return to Johannesburg with thrice-weekly non-stop A350-900 services in August, more than a year after delaying the plan. This comes after the Centers for Disease Control and Prevention downgraded South Africa’s COVID-19 risk alert level recently.

According to the US DOT, Delta, in May 2020, had first applied to the SADOT to amend its Foreign Operator’s Permit for the Johannesburg-Cape Town co-terminalisation authority, which would have allowed it to stop in Cape Town on the return segment of its Atlanta-Johannesburg service. Delta would not have transported local Johannesburg-Cape Town traffic on the route.

“There followed months of repeated requests by the carrier to secure its authority and further outreach by the US Government in support of Delta’s application, which is consistent with the rights under the (bilateral air service ) agreement, which in fact allows for co-terminalised services by carriers of both countries,” the DOT states. A year later, on May 14, 2021, the SADOT had informed the US DOT of its view that the agreement “does not confer domestic co-terminalisation rights for designated airlines of both countries,” and that it intended to deny Delta’s application. “The Department believes that the SADOT has chosen to unilaterally reinterpret the provisions of the annex of the agreement specifically to prevent Delta from exercising its bilateral right.” According to the US DOT, the bilateral air service agreement between the countries entitles US airlines to operate “from a point or points in the US via intermediate points to Cape Town, Johannesburg, and Durban King Shaka”.

“The US Government has raised its concerns at multiple levels and agencies of the Government of South Africa, advising them that this SADOT reinterpretation could have possible ramifications for the authority SAA holds from the Department. The US Government specifically advised the Government of South Africa that those ramifications could include the rescinding of SAA’s existing authority to co-terminalise services in the United States. To date, the Government of South Africa has offered no meaningful response.”

SAA is due to restart with a clean balance sheet on domestic trunk routes and select regional ones in August after having been in bankruptcy protection since December 2019, but is not expected to make a return to international routes any time soon. The carrier’s ZAR14 billion rand (USD988 million) debt liabilities are being cleared over the next three years through a government bail-out, with Takatso - a semi-private consortium involving Johannesburg’s Global Aviation Operations (GE, Johannesburg O.R. Tambo) and state-funded Harith asset fund management firm - expected to inject ZAR3 billion (USD211 million) in working capital under a new strategic equity partnership still to be finalised.

Meanwhile, in the same order, the US DOT has, however, granted SAA permission to serve 25 US points beyond its US gateways on code-shares with a US partner airline.

It has also allowed SAA exemption authority for one year to operate scheduled passenger, property, and mail flights and foreign charters (effective immediately) to its previous US gateways. This means SAA has one year to resume any of the following:

  • Johannesburg and New York via Sal Amilcar Cabral Int'l, Cape Verde;
  • Johannesburg/Cape Town and Miami Int'l, Florida;
  • Johannesburg and Los Angeles Int'l, California (and on this Los Angeles route, to commingle blind sector traffic not moving in foreign air transport between Johannesburg and Rio de Janeiro Int'l, Brazil);
  • Johannesburg/Cape Town via Sal Amilcar Cabral Int'l, Cabo Verde, and Atlanta Hartsfield Jackson;
  • Johannesburg/Cape Town, and Washington Dulles, via Ilha do Sal, Cabo Verde;
  • SAA’s US gateways and Dakar Blaise Diagne Int'l, Senegal, as an intermediate point on SAA’s authorised US-South Africa services; and
  • SAA’s US gateways and South Africa via intermediate points with local traffic rights as permissible under the US-South Africa agreement and via other intermediate points without local traffic rights.