Takata, injured drivers reach deal to end US bankruptcy

The Japanese company’s air bags can explode with too much force and have been linked to at least 21 deaths and hundreds of injuries. (Reuters)
Updated 12 February 2018

Takata, injured drivers reach deal to end US bankruptcy

WILMINGTON, Delaware: Takata’s US unit reached a settlement with its creditors, lawyers for those injured by its deadly air bags and automakers that smoothes the way to end its Chapter 11 bankruptcy and sell its viable operations, according to court papers.
The Japanese company’s air bags can explode with too much force and have been linked to at least 21 deaths and hundreds of injuries, prompting the largest recall in automotive history and forcing Takata and its US unit, TK Holdings, into bankruptcy.
The US unit was gearing up for a court fight starting on Tuesday to get approval for its plan to exit bankruptcy over the opposition of a committee for injured drivers and a separate committee of unsecured creditors.
But those two committees, automakers and Key Safety Systems, which is acquiring the viable business lines of Takata, reached a deal that resolves the biggest objections to the plan, according to court documents filed on Saturday.
Under the agreement, a trust will be established to pay compensation for those injured or killed by the air bags, which will be funded in part by automakers surrendering some of their claims against Takata.
The 13 automakers that joined the agreement include General Motors, Ford, Toyota, and the US affiliates of Honda and Volkswagen.
An amended plan of reorganization will be filed with the US Bankruptcy Court soon, according to Takata’s US unit.
Tuesday’s court hearing had been adjourned to Thursday at the earliest, Takata’s US unit said in court papers filed on Sunday.
A spokesman for the US unit and lawyers for the committee of injured drivers did not immediately respond to a request for comment.
The trust will pay compensation based on the injury, ranging from $10,000 for bruising to $5 million for death or loss of eyesight, according to court documents.
If the agreement is approved by the Bankruptcy Court in Wilmington, Delaware, injured drivers will be prevented from suing the automakers that joined the agreement.
A lawyer appointed to represent future injured drivers also joined the settlement, as did Key Safety Systems, a unit of China’s Ningo Joyson Electric Corp.
Key Safety Systems plans to acquire Takata’s viable operations for $1.6 billion. The proceeds will fund restitution claims for automakers and help pay injury claims as part of a plea deal with the US Department of Justice.

Emirates, South African Airways expand codeshare deal

Updated 43 min 39 sec ago

Emirates, South African Airways expand codeshare deal

  • Deal will improve connectivity between Dubai and Southern Africa
  • Emirates has been flying to South Africa since 1995 and the first codeshare agreement with SAA was signed in 1997

LONDON: Dubai’s flagship airline Emirates is to expand its codesharing agreement with South African Airways (SAA), aiming to improve connectivity between the emirate and locations across Southern Africa.

The expansion of the agreement will support the African airline’s turnaround plan which aims to make a profit by 2021.

SAA is grappling with financial difficulties, having posted a string of losses and forced to rely on government support. Having failed to make a profit since 2011, it is cutting staff numbers and looks to reduce its route network.

“It’s clear that SAA is struggling to survive and so it makes sense for them to coalesce their operations with the powerhouse that is Emirates as opposed to competing head to head, because they simply won’t cut it against them,” said aviation analyst Saj Ahmad at Strategic Aero Research.

“The deal also opens up the possibility of Emirates deploying more flights to places like Cape Town and Johannesburg as well as codesharing on other SAA-regional flights to points that Emirates doesn’t serve.”

Emirates has been flying to South Africa since 1995 and the first codeshare agreement with SAA was signed in 1997.

Under this deal, SAA is able to offer its customers seats on flights operated by Emirates between South Africa and Dubai. This currently includes four daily flights from Johannesburg, three daily flights from Cape Town and one daily flight from Durban.

The new agreement will see this codeshare expand across the airlines’ networks.

“We have seen great success with the codeshare agreement, having enabled greater connectivity to both SAA and Emirates customers, by offering more choice, flexibility and ease of connections to a wide range of cities via Dubai and across more points in Southern Africa,” said Tim Clark, president of Emirates Airline.

“Increasing the scope of our agreement underpins the strong bonds we share with SAA and our belief that this enhanced partnership will enable further success and gain to the airlines and their customers,” he said.

SAA CEO Vuyani Jarana said: “Our route network and that of Emirates complement one another. The expansion of our partnership will further strengthen key focus areas of the implementation of our turnaround plan.”

The agreement will include the two airlines working to improve connecting times via Johannesburg, to make it easier for people to catch flights to popular regional destinations.