SAA Reaches Amicable Settlement

SAA Reaches Amicable Settlement
Springbok 203 Heavy is arriving at John F. Kennedy International Airport. Photo: AEMoreira042281

In May 2021, the U.S. Department of Transportation’s Office of Aviation Consumer Protection (“US-DOT”) imposed a civil claim against South African Airways (SAA) on behalf of passengers complaining about delayed refunds on their tickets purchased to and from the United States for flights that were cancelled during the Covid grounding of airline operation. SAA was one of several global airlines that faced the same penalty.

SAA is pleased that it has reached an amicable settlement with the U.S. Department of Transportation) on the matter. From the original penalty claim amount, SAA has accepted the settled imposition of a civil penalty of US$300 000 (roughly R5,4million) to void protracted litigation. The penalty will be paid to the US Treasury in tranches over 540 days of the issuance date of the consent order.

SAA cancelled or significantly changed the flights due to the impact of the COVID-19 pandemic. SAA’s situation was exacerbated by the fact that the company went into administration by Business Rescue Practitioners in December 2019.

In its continuous engagements with the US-DOT, SAA has always contended that notwithstanding the challenges of Business Rescue and the COVID-19 pandemic, SAA took extraordinary steps during 2019-2022 to process refunds for passengers whose flights were cancelled or significantly delayed by the airline, not only in the USA but throughout SAA’s markets.

Between April 2021 and March 2023 SAA has paid around R2.2 billion in Covid period unflown tickets refunds.

“We are pleased that this matter has now been finalised. The intention of the parties was always to find an amicable way of closing this case. We look forward to normalising relations with our customers in the US and welcoming them aboard SAA when we resume flights to the Americas in the future,” said Koekie Mbeki, SAA’s Chief Legal Counsel.