Airlink (South Africa) (4Z, Johannesburg O.R. Tambo) has attacked the South African Department of Transport for its decision to grant South African Express (XZ, Johannesburg O.R. Tambo) more international route authorities despite the fact the state-backed carrier does not comply with legally-mandated provisions to do so.

Last week, SA Express announced that it had been granted route authorities for services to Zimbabwe (7x weekly Johannesburg O.R. Tambo-Bulawayo), Angola (3x weekly Johannesburg OR Tambo-Luanda), and Botswana (7x weekly Cape Town-Gaborone) by the Department's International Air Services Council (IASC) despite Airlink's objections.

"SA Express’ new regional frequencies were finally approved following a delay as a result of objections by competitor airline SA Airlink, in their efforts to remain the sole operator in these markets," airline spokeswoman Mpho Majatladi said in a statement.

“We are very pleased with the Council’s decision as it allows us to accelerate the implementation of our strategy to offer increased much needed regional services to achieve commercial sustainability. To this end, we plan to launch these new routes as soon as possible as they are high yield markets."

In a follow-up statement, Airlink, which is a privately-owned South African Airways franchisee and therefore, in theory, a sister carrier to SA Express, repudiated SA Express's claims that its objection was based on precluding competition on the three allocated routes.

Airlink said its objection was premised on SA Express not complying with South African law which requires carriers applying for international route authorities to be able to demonstrate their “financial capability” and ability "to operate an international air service” when applying for air services licences or when amending them.

It noted the fact that SA Express has failed to table its annual financial statements for the past three years while highlighting recent public admissions by Minister of Public Enterprises (DPE) Pravin Gordhan that neither SAA nor SA Express could be considered going-concerns at present given both are loss-making and would likely require additional state funding.

"Precedent, according to Airlink’s experience, is that applicants are required to submit their audited annual financial statements and demonstrate that at the time of the application they are not insolvent, that they have the financial means to undertake the additional air services and that they are a going concern."

"The Council’s approval of SA Express’s application to operate the additional international routes, in the absence of this financial information, having regard for the fact that SA Express is experiencing financial difficulties and is not a going concern, and in the knowledge that the majority of the airlines’ fleet was unserviceable, is prejudicial to the general public and the air service industry," Airlink argued.

In summation, Airlink argued that the IASC and therefore the DOT's decision to award SA Express its requested route authorities was prejudicial, if not operationally dangerous, to the South African tax payer and public at large.

"The law makes no provision for preferential treatment of state-owned airlines in the granting of licenses or amendments to the detriment of the private sector and should be applied fairly and equitably if South African businesses are to thrive and deliver the contributions our society and economy so desperately need," it said.

"We strongly believe competition should be fair. Competing with state-subsidised perpetual loss-making competitors, that lack a profit imperative, receive tax-payer bailouts and which, by its own admission, is unable to keep all of its aircraft airworthy with nearly a quarter of its flights in Q1 and Q2 of 2019 being delayed or cancelled, is grossly unfair."

Meanwhile, the Competition Commission (CC) of South Africa has dismissed a complaint filed against Airlink by Fly Go-Air (Johannesburg O.R. Tambo) back in 2015.

At the time, the short-lived virtual carrier's CEO Reg Sivsanker accused Airlink of anti-competitive practices including industrial espionage dating back to 2009. The Witness newspaper said at the time that among the allegations Sivsanker levelled were that Airlink had cut its fares to drive Fly Go-Air out of the Johannesburg O.R. Tambo-Pietermaritzburg market and that Airlink and Pietermaritzburg Airport had colluded to divert several of Fly Go-Air's flights to Durban King Shaka in order to force his airline's costs up.

In a ruling issued on Monday, October 7, the CC said only that: "The Commission is of the view that the conduct complained of does not contravene the Competition Act."