Malcolm Libera | 11 November 2024
FlySafair has responded to a recent ruling by the Chairman of the International Air Services Licensing Council (IASC) concerning its compliance with South African nationality provisions in its ownership structure.
This ruling, which surfaced in early November, highlights that FlySafair’s ownership arrangement does not align with South African legal requirements.
Under current law, foreign entities are limited to a 25% ownership stake in South African airlines, yet FlySafair’s main shareholder, Ireland-based ASL Aviation Holdings, reportedly holds a 74.86% stake.
The outcome of the Council’s review could lead to sanctions, potentially impacting FlySafair’s operations.
However, the airline has clarified that this ruling affects only its international services and has no bearing on its domestic flights, which are governed by a different license and remain unaffected.
The scrutiny of FlySafair’s shareholding structure began in October 2022 after complaints by Airlink and Global Aviation, the latter operating under the brand LIFT.
These complaints raised concerns that FlySafair’s foreign ownership exceeds the permissible limits and questioned the airline’s adherence to local regulations.
According to FlySafair’s financial records, ASL Aviation Holdings’ majority stake indicates that FlySafair’s primary ownership resides abroad, a configuration that raised regulatory concerns, especially since FlySafair did not apply for an amendment to its air service license after restructuring in March 2019.
Following the inquiry, the IASC now plans to impose sanctions, which could include suspending FlySafair’s license or levying fines unless the airline modifies its shareholding structure to conform to local laws.
In response, FlySafair has moved to address the Council’s decision, emphasising its ongoing commitment to regulatory compliance and transparency.
The airline has filed an urgent interdict application to protect international customers from any potential service disruptions while it works through the matter with the IASC.
FlySafair said it remains confident that it has adhered to regulatory standards over the years and is committed to ensuring uninterrupted service for its international customers as it navigates the regulatory process.
FlySafair reiterated that this decision solely pertains to its international routes, leaving its domestic flights unaffected.
Its domestic services are governed under a different licensing framework, meaning passengers on local flights can continue flying without concern.
FlySafair has underscored the importance of an outcome that supports the broader interests of travellers and the South African public.
To reassure customers and mitigate any potential service disruptions, FlySafair noted it is actively engaging with relevant authorities and has prepared contingency measures if necessary.
The airline intends to safeguard its service availability, particularly in light of the rising demand for flights during the summer holiday season.
FlySafair expressed hope that all stakeholders, including its competitors, recognise the broader impact on the aviation sector.
In this vein, the airline noted that limiting service on its international routes could inflate fares and disrupt travel plans for South Africans and visitors alike.
FlySafair cited its impact on the Johannesburg-to-Harare route, where increased seat availability introduced by FlySafair last year significantly reduced fares by up to 50% during certain periods, underscoring the positive impact of competition on airfares.
Competitors have raised objections to FlySafair’s interdict application, positioning the issue as a matter of competitive interest.
FlySafair, however, said it remains dedicated to minimising disruption for travellers and believes the broader aviation community stands to benefit from a balanced resolution.
The airline continues to work closely with regulatory bodies to ensure a swift and fair outcome and emphasizes its dedication to upholding the highest operational standards.
FlySafair’s response highlights its priority on transparency and service continuity as it addresses the Council’s concerns regarding its ownership structure.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.