South Africa’s largest airline in deep trouble

South Africa’s largest domestic airline, FlySafair, faces an uncertain future following adverse regulatory rulings.

Last month, South Africa’s Air Services Licensing Council ruled that FlySafair does not comply with the Air Services Licensing Act.

South Africa’s Air Services Licensing Act stipulates that domestic airlines must have at least 75% local ownership.

The International Air Services Act requires substantial local shareholding, which is widely accepted to be above 50%.

FlySafair is 74.86% owned by ASL Aviation Group, an Irish aviation services holding company focused on cargo and passenger airline operations.

This shareholding seems to be contravening the South African and international Air Services Licensing Act.

Airlink and Global Aviation Operations, which operates Lift, lodged formal complaints regarding Flysafair’s shareholding, and an inquiry was launched in October 2022.

Towards the end of last year, the International Air Services Council (IASC) ruled that FlySafair’s shareholding structure was not compliant with South African law.

The IASC said FlySafair has contravened and failed to comply with provisions of the law regarding local ownership.

It said the company structure comprised a 49.86% shareholding by the Safair Investment Trust, which is 100% owned by ASL, in addition to the 25% direct ASL shareholding.

The IASC also ruled that FlySafair failed to apply for an amendment of its air service licence when its ownership structure changed in March 2019.

The International Air Services Council said it would announce the planned sanction within the next few weeks.

In another blow to FlySafair, South Africa’s Air Services Licensing Council has also ruled that Flysafair does not comply with the Air Services Licensing Act.

These rulings and pending sanctions threaten FlySafair’s South African operations, which can cause havoc for travellers.

Should FlySafair planes be grounded, it will leave many local and international travellers stranded.

FlySafair responds

FlySafair released a statement, saying it believes it structure and operations align with the required legal provisions.

“While these recent findings challenge our understanding, we remain steadfast in our commitment to compliance,” FlySafair said.

The airline said it takes the rulings seriously and looks forward to engaging constructively with the council to address concerns and collaboratively explore viable solutions.

“FlySafair’s primary focus is, and always has been, to operate within the bounds of the law while delivering exceptional service to our valued customers,” it said.

“In this context, we are prepared to consider all reasonable options to ensure alignment with the act’s requirements.”

The airline said it does not expect any flight disruptions while it is engaging with the regulatory bodies.

“We will continue to operate normally while we resolve this matter and seek legal recourse, if necessary, to protect our ability to serve the South African public and economy,” it said.

FlySafair said it was confident that, through dialogue and cooperation, this issue could be resolved amicably.

Such a solution, it said, would ensure compliance while safeguarding the interests of all parties involved.

“FlySafair remains committed to upholding the highest corporate governance standards and operational excellence,” it said.