South Africa's Competition Commission (CC) has approved Comair (South Africa)'s push to acquire the entire share capital of Star Air (South Africa) (BRH, Johannesburg O.R. Tambo) (SAC) along with its aircraft repair business Star Air Maintenance (SAM).

Although concerns relating to the transaction have been raised by third parties, the CC said in a statement last week that it has recommended that the proposed merger be approved without conditions.

Comair said in May that had entered into an agreement with Sundrops Investments Proprietary Limited, Smashing Star Investments Proprietary Limited, and Marcel Liebenberg to acquire all shares and claims in Star Air Cargo Proprietary Limited and Star Air Maintenance Proprietary Limited for ZAR75 million rand (USD5.14 million) plus profit share payments, the sum of which is capped at ZAR250 million (USD17.14 million).

Comair operates the British Airways brand and the Kulula Air (MN, Johannesburg O.R. Tambo) low-cost carrier in South Africa, with a network of domestic flights, and international services to Zimbabwe, Zambia, Mauritius and Namibia. The company has a fleet of 35 aircraft; two wet-leased B737-300s, twenty-three B737-800s, eight B737-400s (seven of which are inactive) and an inactive B737-8.

SAC and SAM, provide aircraft leasing and maintenance services, and its fleet comprises of ten aircraft, five B737-300s and five B737-300(F)s. Comair is actually a current customer of SAC, with two of its passenger aircraft coming from its leasing partner - namely ZS-TGB (msn 29327) and ZS-VDB (msn 27345). Other Star Air customers are currently LAM - Linhas Aéreas de Moçambique (TM, Maputo) and BidAir Cargo.

Comair's management is planning to meet South African Airways' (SAA) recently appointed business rescue practitioner, Les Matuson, to discuss the more than ZAR1 billion rand (USD69 million) settlement won against SAA in February. The airline filed for bankruptcy protection proceedings on December 5.

The financial award was to settle a long-running anti-competition case where SAA used a system of "overide incentive schemes" where travel agents were paid substantial commissions to book the national carrier rather than competing airlines like Comair.

However, Chapter six of the South African Companies Act, which is concerned with business rescue procedures, puts a moratorium on creditor claims against a company in business rescue - like SAA. According to the legislation, no legal proceedings and enforcement actions can be instituted against a company in business rescue.