FlySafair’s competitors are presenting a case to the International Air Services Council and the Air Services Licensing Council, claiming that the carrier’s foreign ownership is giving it an unfair competitive advantage.
As a result, FlySafair is under investigation for its alleged majority ownership by foreign shareholders for a breach of the aviation licensing conditions and the laws governing them in South Africa, reports Daily Maverick.
The Air Services Licensing Act requires that holders of domestic scheduled operator licences in South Africa must have 75% of their voting rights held by residents of South Africa.
Meanwhile, the International Air Services Act requires airlines based in the country and flying overseas to have substantial local voting rights. The airline industry has interpreted this to be a minimum of 51%.
Airlink and the shareholder of LIFT, Global Airways, have accused FlySafair of having only 25% local ownership.
According to the Daily Maverick, the airlines believe that Safair Operations, the company under which the brand FlySafair trades, and that the company is divided by the following shareholding and voting rights:
- 25% is held by a company called Safair Holdings;
- 25,14% is held by B4i Safair, and;
- 49,86% is held by a trust.
Airlink and Global Airways believe that the only applicable local ownership of Safair Operations is the 25,14% held by B4i Safair, and that the 49,86% trust ownership is held by parties associated with Safair Holdings.
Kirby Gordon, FlySafair’s Chief Marketing Officer, told The Sunday Times, that the airline had not required foreign investment since its restructuring and relaunching in 2013.
According to Gordon, the airline’s parent company’s external investors do not give the carrier any competitive advantage.
In 2013, the airline’s Irish owner, ASL Aviation Holdings, was reported for not complying with South African foreign ownership laws. The company was grounded and restructured to comply with legal requirements before relaunching its airline in 2014, reports My Broadband.
Gordon said the most recent complaint came after FlySafair had applied for additional rights to increase the frequency of its flights between Johannesburg and Harare.
