Although fastjet has concluded an option agreement to buy 1time’s shares and expressed its hopes to operate domestic flights early this year, the Department of Transport says it may take a lot longer before 1time’s flights are reinstated.
DoT deputy director: licensing and permits, Andries Ntjane, says, contrary to what fastjet would have the public believe, 1time will not be operating in the “near future at all”, adding that a “lengthy process” still has to be followed before approval can be granted. He explains that 1time’s AOC (air operator certificate) was suspended when it filed for liquidation, and before flights can be resumed the Civil Aviation Authority has to check and inspect the whole operation.
Further, he says: “From the [Air Services Licensing] Council’s point of view, 1time’s demise was due to funds. We still have to look at the issue of liquidity before we look at anything further. Regardless of any deals they are concluding, we operate according to the law.”
According to its statement, fastjet will buy the entire issued share capital of 1time from its parent company, 1time Holdings, for R1. The deal is subject to 1time’s entering into a scheme of arrangement with its creditors. 1time’s provisional liquidator, Tshwane Trust, says the new shareholders will make an offer to 1time’s creditors, who are owed about R462m. If approved, the arrangement will then be submitted to court for sanction.
Another obstacle for fastjet is that, with regard to shareholding, South African legislation states that foreign ownership can account for a maximum of 25%, meaning the remaining 75% has to be South African owned. “We have to protect our market. We can’t have people from outside dominating the market,” Andries adds.
Fastjet’s statement claims that, by acquiring the shares, the company would gain the right to operate domestic and regional air services in South Africa. Fastjet will take over up to three of the 12 aircraft in 1time’s fleet, which will be on a new operating leasing agreement. The initial routes are all domestic, serving Johannesburg, Cape Town, Durban, Port Elizabeth and East London.
For more on this story refer to TNW January 9/16
