South African low-cost airline Flysafair could be stripped of some of its most profitable routes after regulators found it breached rules on foreign ownership standards. The country's authorities state that 75% of the voting rights of aviation licensees (airlines) are owned by South African residents, and that licensees effectively control the airline, its finances and operations. It is argued that there must be.
The case was initiated following a complaint by the owner of fellow South African airline Lyft Air, citing anti-competitive practices and alleging non-compliance with relevant regulations.
In its initial response to the investigation being carried out by the country's Air Services National Council and the International Air Services Licensing Council, Flysafair has appealed the guilty verdict and requested immunity from South Africa's Transport Minister Barbara Creecy. It is reported that a lawsuit has been filed. by each organization. This violation relates to the violation of foreign ownership norms in both domestic and international markets.
The council maintains that 75% of Flysafair's ownership is in Ireland and Belgium, not South Africa, but the airline claims the council is confusing the reality of its ownership and control. There is. However, a final judgment against the airline could result in the airline losing traffic rights and, in the most extreme cases, being stripped of its operating license and grounded.
The company hopes to protect itself from possible sanctions by applying for an exemption from the transport minister, most likely on the country's most profitable and busiest airline routes. It would be the deprivation of traffic rights in some parts of the country. If such a penalty is imposed, it is not only to punish the airline for its non-compliance, but also to ensure that the South African authorities are responsible for the loss caused to the country by the airline's prohibited conduct, which has allowed excessive overseas investment for many years. The purpose may also be to allow authorities to take it back. .
The airline said in its application that the council's interpretation of the law was “very unique and irregular in the context of the global aviation industry, and is an example of the existence of similar laws in other countries around the world.” There are almost no.” However, domestic aviation law experts say Flysafair's interpretation of the rules is flawed and is effectively putting the airline's operations at risk in an attempt to delay the process. You are underestimating the outlook.
Kirby Gordon, Flysafair's chief marketing officer, said in an interview with local media that Flysafair has applied to the court for a confirmation order, pending a court review of the council's finding of disapproval. He admitted that he had appealed for the intervention of Transport Minister Barbara Creasy by exempting him from the relevant legal provisions. -Compliance completed.
A spokesperson for the ministerial half said: “Taking into account the regulatory environment, this request is currently being considered by the legal services of the respective ministries.”
The sanctions that may arise after this process is completed can be severe. Despite Flysafair's ownership being under regulatory scrutiny since 2022, the company has reportedly taken few meaningful steps to address the issue.
According to ch-aviation, Flysafair currently operates a fleet of 36 Boeing 737 aircraft on 23 scheduled routes, with its base at Johannesburg OR Tambo International Airport (JNB) serving 14 destinations in five countries in Southern Africa. Serving destinations. The airline is one of the main airlines on the 'Golden Triangle' route between Johannesburg, Durban and Cape Town.
With a market share of approximately 60% in South Africa's domestic market and operating 160 daily flights carrying 30,000 passengers, any disruption to Flysafair and its operations would result in the loss of thousands of passengers. travel plans could be disrupted, with potentially disastrous consequences for Flysafair itself. The company also said tough sanctions have disrupted the market and jeopardized the travel plans of thousands of passengers heading to Cape Town's coal conference and mining indaba, which is expected to attract more than 10,000 international tourists. I warned you that this is a possibility.
