Lift Airlines founder and industry veteran Gidon Novick has resigned from the board of the Takatso Consortium - South African Airways' chosen strategic equity partner (SEP) - amid concerns about being able to fulfil his fiduciary responsibilities as a director.

In a statement on November 14, Novick cited as reasons for his resignation "a lack of communication and concerns about the progress of the transaction, the ability of the consortium to raise the capital committed, and his group's role in the business going forward".

Novick represented minority partner Global Aviation Operations (GE, Johannesburg O.R. Tambo) on the Takatso board. However, despite his departure as director, Global would retain its minority stake in Takatso. He and Global remained "committed as significant minority shareholders of the company and to provide assistance wherever we can". He added: "We have not given up and remain completely committed to assisting wherever we can. We've opened up discussions with the SAA leadership team to explore areas of cooperation in the interim."

In response, Takatso said it deemed Novick's resignation as "appropriate", suggesting there were "inherent conflicts of interest" between his role in the consortium and as co-founder of Lift Airline (known as LIFT), the scheduled airline brand of Global Aviation, which competes domestically with SAA. Still, Novick had held the role when the government chose Takatso as its preferred strategic equity partner about 18 months ago.

"LIFT is a competitor to SAA, and the Takatso Board had identified the potential conflicts of interest between the consortium and LIFT and has sought to manage these throughout the course of the transaction. This includes the establishment of appropriate confidentiality and information management regimes in the spirit of maintaining fair competition in the South African airline market and in compliance with South Africa's competition regulations," Takatso said in a statement. "Takatso is currently pursuing the SAA transaction's merger clearance by the competition authorities and seeks to comply with the relevant legislation at all times."

"LIFT has (independent of Takatso) pursued business relationships with SAA outside of the Takatso-SAA transaction and competition processes, thereby heightening the requirement for Takatso to maintain internal confidentiality over information relating to SAA and the SAA transaction. Novick's resignation will therefore assist Takatso in managing these inherent conflicts of interest and maintaining confidentiality over sensitive information on a continuing basis."

"Takatso, as funded and led by [majority shareholder, black economic empowerment firm] Harith General Partners, continues to work closely with the team from the Department of Public Enterprises (DPE) to conclude the acquisition of a controlling interest in SAA. Additionally, Takatso has developed a business plan for a sustainable and competitive SAA endorsed by international aviation experts.

"Takatso has supplemented its technical expertise since identifying the abovementioned conflicts of interest and is confident regarding its team's capability to close the transaction, thereby paving the way for Takatso to operate a successful SAA once the proposed transaction has been implemented. Takatso is in advanced discussions to diversify SAA's future industry partnerships once clearance is granted by the competition authorities and the transaction is implemented, which will be key success factors in creating an agile Pan African airline," the consortium said.

Novick earlier this month voiced his frustration with the protracted process and lack of transparency of the SEP transaction. After more than a year of negotiation, the deal is now eventually being scrutinised by the country's draft regulators.

Novick told ch-aviation that Global - an ACMI specialist that also owns the LIFT brand - was being kept out of the loop: "We don't get updates. We don't have any line of sight into the process and the deal's progression. We just don't know, other than what we read in the newspapers."

"Our group invested significant time and energy into this project," he said in the statement. "Our goal was to make a real difference to this country by turning a hugely problematic state-owned enterprise into a global success and a South African case study for government and private sector cooperation. Something that South Africans would be proud of."

As the majority shareholder in Takatso, Harith General Partners is responsible for raising ZAR3 billion rands (USD173 million) in operating capital to be injected into SAA in return for a 51% shareholding. The government will retain 49% and absorb all of SAA's historical debt. Of ZAR3.5 billion (USD187 million) in outstanding government contributions to cover the debt, ZAR1 billion (USD56 million) is still outstanding in ticket refunds; the rest is due to concurrent creditors over three years in three tranches.

SAA Chief Executive Officer John Lamola told ch-aviation that the airline was operating profitably with no cash-flow concerns and going ahead with its intercontinental and regional expansion and fleet growth plans despite any delays - or even indefinite postponement - of the SEP transaction. "We have an overlapping strategy where we have a plan that even if the SEP is delayed – even delayed indefinitely – we have a route network plan, we have a fleeting plan, and we are now in this coming period from around November implementing the first elements of that plan. And that plan sees us by April ramping up to about 12 aircraft as soon as we can," he said.