A special tribunal issued a ruling that annuls the decision by South African Airways (SAA) to extend a dry lease agreement worth 85.34 million rand with Flyfofa Airways for a Boeing 737-300 freighter. This decision was made by the Special Investigating Unit (SIU).
Procurement System
The corruption oversight body established that the SAA Council's decision to extend the lease for 36 months, totaling 85,340,863 rand starting from July 1, 2019, was made without adhering to proper procurement procedures and without approval from the Ministry of Finance for deviation. This violates the requirements of Section 217(1) of the Constitution, which stipulates that the procurement system must be fair, equitable, transparent, competitive, and cost-effective.
Tribunal demands Flyfofa provide payment report
Furthermore, the Tribunal ordered Flyfofa to provide the SIU lawyers with a detailed report on all funds received from SAA, as well as on expenses that were actually and properly incurred while fulfilling the contract terms, within 30 days of the ruling dated September 11, 2026. The company is also obliged to provide a report on the downtime period of aircraft ZS-TGG and any substitute services provided during this period.
The Tribunal additionally ruled that Flyfofa must pay the SIU any amount deemed profit or unjust enrichment within 14 days, with interest calculated at an annual rate of 11% from the date of the ruling.
The SIU investigation showed that SAA effectively transferred its internal night cargo operations to Flyfofa. Evidence presented before the Tribunal demonstrated that SAA had previously assessed Flyfofa's financial position as 'high risk,' citing the lack of audited financial statements, a solvency ratio of 0.1, and losses for the previous two financial years.
Judge Fortuin criticized the actions of the SAA Council, even though the Council members were not named as respondents. He noted that 'the SAA Council's conduct on this matter deserves criticism,' adding that 'this conduct has a price, and it is not just for SAA. It is a price for the public.'
In conclusion, the Tribunal ordered that this decision be sent to the minister responsible for SAA, as well as to the directors and the board chairman for consideration of the need to take further action.