FlySafair approaches court as possible licence suspension looms

One of South Africa’s largest airlines, FlySafair is facing undisclosed sanctions, which could be fines, suspension, or cancellation of its operation licence over it’s alleged non-compliance with ownership laws. It has, however, filed a court interdict to halt this.

The International Air Services Licensing Council (IASLC) has ruled that the airline’s shareholding structure has contravened the International Air Services Act.

FlySafair files court interdict to halt sanction

FlySafair in response to the ruling by IASLC has filed for a court interdict to halt any sanction against its international operations, as it maintains everything is above board.

The ruling only affects the airline’s international services and has no impact on its domestic flights, which are governed by a different licence.

ALSO READ: FlySafair not compliant with foreign ownership rules, says licencing council

Under the International Air Services Act, because FlySafair is operating within South Africa’s airspace, it must be majority owned by South Africans.

However, IASC found that the Irish-based ASL Aviation, directly and through subsidiaries, owns almost 75% of FlySafair.

The legislation states that foreign entities’ ownership may not exceed 25% of the county’s airlines. ASL Aviation bought the majority stake in the airline in 2019.

Competitors complain about FlySafair

Airlink and Global Aviation, the operator of Lift, raised concerns about the FlySafair’s shareholding. The IASLC began looking into it four years ago.

The findings of IASLC comes just before of one of the busiest travel times for South Africans.

The cross-border routes that are under threat include Joburg-Harare, Joburg-Mauritius, Joburg-Victoria Falls, Joburg-Zanzibar, and Cape Town-Windhoek.

ALSO READ: FlySafair secures rights to destinations in several neighbouring countries

FlySafair fights back

While the airline is awaiting to hear about sanctions from the IASLC, it filed for an urgent court interdict on Monday.

In a media statement, the airline said it is committed to transparency and operational integrity.

“We respect the role of the council and the structures allowing competitor input and are fully prepared to engage in a fair process to find a resolution.

“We are engaging with the relevant authorities to avoid any negative impact on customers and have backup plans in place should we need them.

“Competitors have raised objections to FlySafair’s interdict. While their positions may reflect their business interests, we hope that all parties consider the potential impact on travellers and the broader aviation community.”

The airline’s ownership breakdown

Moneyweb reported that the Irish-based ASL Aviation acquired the Safair Investment Trust, an entity set up a decade ago to fix issues around control by ensuring that South African entities (the trust and an employee share-ownership scheme) held ±75% of the airline. Today, ASL ostensibly owns 74.86% of FlySafair.

However, it is possible that the majority equity holder has reduced voting rights (25%) so that it complies.

If domestic flights are grounded, SA would come to a standstill

FlySafair operates the majority of South Africa’s domestic flights, with more than 5 000 flights a month, using 36 aircraft.

Between Johannesburg and Cape Town alone, it operates up to 27 return flights a day (including the six out of Lanseria). Lift operates seven, Airlink seven, and SAA 10.  FlySafair holds 60% of the market, higher than even the peak held by Comair (Kulula.com/British Airways) before it collapsed.

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