South Africa’s fractured airspace is set for more upheaval as dominant operators– Airlink and Global Airways Operations – which co-own the domestic airline, Lift, square off with Safair Operations, the owner of FlySafair, over alleged 74% foreign ownership.
Airlink and Global Airways Operations have launched complaints with two aviation authorities: the International Air Services Council, and Air Services Licence Council.
The knife fight, set for April 11, emanates from Airlink and Global Airways’ complaints that Safair is largely owned by foreign shareholders, against the conditions of its aviation licence and the country’s laws.
The central complaint is that foreign investors and shareholders predominantly own Safair, thus breaching the Air Services Licensing Act and the International Air Services Act.
The former requires that holders of aviation licences in South Africa have a minimum of 75% local shareholding, and the latter that airlines based in the country and flying overseas have a “substantial” local shareholding.
The airline industry has interpreted this to be a minimum of 51%.
Industry insiders said Safair’s foreign holding was pegged at 74%.
In the aftermath of the collapse of the Takatso Consortium’s 51% takeover of national carrier South African Airway, the council’s resolution could necessitate restructuring of FlySafair to suit regulations, consequently altering the airspace as behind the scenes moves are made.
International Air Licensing Council chairperson Nomveliso Ntanjana confirmed it was perusing the papers filed by both sides for the hearing scheduled for early April.
Ntanjana said the council, which along with its domestic counterparts now administratively fell under the ambit of the South African Civil Aviation Authority would not divulge the merits of the case.
Safair, the parent company of low-cost carrier FlySafair, with a significant industry portion in 10 years of operations locally, said it was was aware of the complaints against it, but could not publicise its defence.
Kirby Gordon, FlySafair’s chief marketing office, said, “The short story is that we know the parameters outlined within the law and are very confident that we are well within the requirements. Safair is not so much a parent company to FlySafair, it’s one company and we merely trade as FlySafair on the commercial passenger side of things.”
“These are not spaza like businesses… Nobody is selling chips to anybody, airlines transverse international airspaces. Flouting of any rules is serious,” aviation analyst Phuthego Mojapili told Business Report.
Mojapili, who currently is working from the US, said the motive of the complaint could have stemmed from the fact that Safair’s growth appeared artificial to its competitors.
“We do not know the severity of the decision to be taken by the council, but this is a serious matter as it transcends sovereign borders and touches on diplomatic relations,” Mojapili said.
BUSINESS REPORT