In the High Court in Pretoria this week Comair, the British Airways franchisee that operates kulula.com, claims that South Africa Airways (SAA) is borrowing more funds on the back of new government guarantees to pay interest on older debts.
Legal counsel for Comair, David Unterhalter SC, said the Treasury was "binding the hands of Parliament" by effectively giving SAA a cash injection, without tabling the decision in Parliament.
Comair challenged the R5bn government guarantee given to SAA in 2013 and again in February when a further R6.5bn guarantee was given to the airline.
"The guarantees are a device for using financial institutions to provide funding to SAA that will eventually be paid by the government," said Unterhalter.
He said alternatives such as placing SAA in business rescue or recapitalising it, which would require parliamentary approval, needed to be considered.