A recent decision by the Air Services Licensing Council (ASLC) finding FlySafair non-compliant with domestic licensing rules, could jeopardise the operations of other major airlines in South Africa and potentially bring significant disruption for air travel, says FlySafair in a media release issued yesterday afternoon, January 14.
“The Council has issued a ruling that calls into question the compliance of numerous airlines with the Air Services Licensing Act, specifically regarding ownership requirements,” says the statement.
“The crux of the matter lies in the interpretation of the Act's provision mandating that 75% of an airline's voting rights must be held by ‘Residents of the Republic’. The ASLC's stance is that this means that airlines must have individual (natural person) shareholders, effectively excluding trusts and companies – a common ownership structure in the industry. Ignoring the fact that most individuals do not have the capital or resources to own an airline, this interpretation potentially renders the majority of South African airlines non-compliant, including major players like Airlink and SAA.”
However, Airlink later yesterday issued its own media release contradicting this and saying it complied with all SACAA regulations. "Airlink notes this afternoon’s news release by FlySafair. Airlink complies with all South African civil aviation regulations and respects the regulatory processes and decisions of the domestic and international licensing councils, which are the mandated economic regulators for South Africa’s commercial aviation industry."
Ambiguity
FlySafair is a central figure in this dispute and is adamant that the ASLC's interpretation is not only overly restrictive but also contradicts established legal precedent. “FlySafair has therefore taken proactive steps to address the ambiguity in the Act by seeking a declaratory order from the courts. This legal action aims to provide clarity and guidance for the entire industry, albeit that the ASLC has opposed this process.”
“FlySafair remains committed to resolving this issue constructively and advocating for a sensible interpretation of the Act that supports the growth and sustainability of the South African aviation industry. The airline is hopeful that the Minister of Transport will take decisive action to steer the process toward a positive outcome.”
The statement continues: “The implications of the ASLC's decision extend far beyond FlySafair. If upheld, it could disrupt the operations of numerous airlines and air service operators, impacting flight schedules, ticket prices, and the overall travel experience for passengers. The uncertainty surrounding the ruling has also raised concerns about potential job losses and the long-term economic impact on the aviation sector.
The potential repercussions of this ruling are catastrophic, said Kirby Gordon, Chief Marketing Officer of FlySafair. “It could cripple the aviation and tourism sectors, leading to reduced flight options, job losses, and economic damage.
