FlySafair approaches court as it faces possible license suspension

FlySafair, one of South Africa’s largest airlines, faces undisclosed sanctions such as fines, suspension or revocation of its operating license for allegedly failing to comply with ownership laws. However, he filed an injunction with the court to stop this.

The International Air Services Licensing Council (IASLC) ruled that the airline’s partnership structure contravened the International Air Services Act.

FlySafair filed an injunction with the court to stop the sanction

In response to the IASLC’s decision, FlySafair applied to the court for an injunction to halt any sanctions against its international activities, arguing that the whole thing was against the rules.

The decision only affects the airline’s international services and not its domestic flights, which are subject to a different licence.

ALSO READ: Licensing council says FlySafair does not comply with foreign ownership rules

Under the International Air Services Act, FlySafair must be majority-owned by South Africans because it operates in South African airspace.

However, the IASC found that Ireland-based ASL Aviation owned almost 75% of FlySafair, directly and through subsidiaries.

According to the legislation, ownership of foreign entities cannot exceed 25% of the airlines in the country. ASL Aviation acquired a majority stake in the airline in 2019.

Competitors complain about FlySafair

Lift’s operator Airlink and Global Aviation have expressed concerns about FlySafair’s shares. The IASLC began investigating this issue four years ago.

The IASLC’s findings come just before one of the busiest travel times for South Africans.

Cross-border routes under threat include Joburg-Harare, Joburg-Mauritius, Joburg-Victoria Falls, Joburg-Zanzibar and Cape Town-Windhoek.

ALSO READ: FlySafair secures rights to destinations in many neighboring countries

FlySafair fights back

The airline filed an emergency court injunction on Monday while waiting to hear from the IASLC about the sanctions.

In a press release, the airline said it is committed to transparency and operational integrity.

“We respect the role of the council and the structures that allow for input from competitors and are fully prepared to engage in a fair process to find a solution.

“We are in contact with the relevant authorities to avoid any negative impact on customers and have backup plans in place should we need them.

“The contestants appealed FlySafair’s ban. “While their positions reflect their commercial interests, we hope all parties will consider the potential impact on passengers and the wider aviation community.”

Ownership distribution of the airline

moneyweb reported He said Ireland-based ASL Aviation had acquired the Safair Investment Trust, an entity set up a decade ago to resolve control-related issues by ensuring that South African entities (trust and employee share ownership scheme) retained ±75% of the airline. Today, ASL apparently owns 74.86% of FlySafair.

However, it is possible that the majority shareholder has reduced his voting rights (25%) and complied.

If domestic flights are stopped, SA will also come to a halt

FlySafair operates the majority of South Africa’s domestic flights, with more than 5,000 flights per month using 36 aircraft.

Between Johannesburg and Cape Town alone, up to 27 return flights operate daily (including six from Lanseria). Lift operates seven, Airlink operates seven and SAA operates 10. FlySafair holds 60% of the market; This is even higher than the peak that Comair (Kulula.com/British Airways) held before its collapse.

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