Flight Centre Travel Group has decided to start selling South African Airways tickets again as its preferred travel insurer has reinstated travel supplier insolvency cover to the state-owned airline.
The travel supplier insolvency benefit covers the failure of an airline when it declares bankruptcy.
Siviwe Dongwana, one of the joint business rescue practitioners of SAA, told Fin24 on Friday that they are thrilled about the TIC decision.
“Customers can now purchase tickets with renewed confidence that they are protected on every step of their journey through either TIC or Bryte insurance,” said Dongwana.
“We also believe that the reinstatement demonstrates a confidence in the business rescue process.”
At the end of November 2019 Flight Centre stopped selling SAA tickets when its preferred travel insurance provider, Travel Insurance Consultants (TIC) – a division of Santam – decided to stop covering SAA tickets under its travel supplier insolvency cover. This was ahead of SAA suddenly going into voluntary business rescue at the beginning of December and due to ongoing concerns regarding the financial stability of the national carrier.
Therefore, as of Friday February 14, Flight Centre Travel Group, FCM Travel Solutions, Corporate Traveller, Flight Centre Business Travel, Cruiseabout and Flight Centre Associates will again sell SAA tickets to its customers, in accordance with its standard terms and conditions.
Fin24 reported in November last year that Santam’s travel insurance division withdrew its insolvency cover benefit on SAA tickets. In a statement at the time, Santam said the action was triggered by a decision by TIC’s international re-insurer to withdraw cover “based on the worsening risk outlook and potential bankruptcy” of SAA.
At the time, TIC said it would monitor SAA’s progress “as it implements a strategy to improve its situation” and would consider reviewing the decision depending on whether SAA gets the “necessary support” and returns to profitability.
In November last year Hollard, Warwick Bloom insurance group also withdrew the insolvency cover benefit part on SAA tickets.
According to TIC, its reinstatement decision comes “after constant talks”, which started in November 2019, between TIC, SAA and the legal advisors of the business rescue process.
“We are confident that the decisions taken during the business rescue process are in the best interest of stabilising SAA and that the majority of stakeholders will agree to a definitive plan that will ensure SAA’s future success,” TIC said in a statement.
“TIC will maintain regular contact with the business rescue Practitioners and SAA to ensure that the decisions taken continue to meet our conditions of insurance cover.”