The Air Services Licensing Council is under fire for its decision to declare FlySafair non-compliant with nationality laws - a move many fear could disrupt South Africa’s aviation industry and harm the public.
The Council claims FlySafair’s voting rights, held by South African trusts and companies, don’t meet requirements under the Air Services Licensing Act. Its view is that such rights must be held by natural persons – a view that critics argue is flawed and would render most airlines non-compliant, including Airlink and South African Airways.
FlySafair has denied allegations of foreign control. While a permissible 25% of the company’s voting rights exist with an Ireland-based firm, the company maintains that the balance lies in the hands of South African residents through local companies and trusts.
The Council’s findings have also been criticised for ignoring legal precedents. These include the 2014 Comair ruling, which clarified that when looking at this legislation the law only considers immediate ownership and control of the actual operation; and shouldn’t look through all ownership layers.
If FlySafair is grounded on this basis, the knock-on could be that Airlink and possibly SAA will need to be grounded too. This would mean that up to 87% of domestic flights could be affected, leading to higher prices and chaos for travellers. Tourism and the broader economy would also take a significant hit.
The only airline unlikely to be affected will be Lift, the complainant in this case. Lift previously attacked FlySafair through the Competition Commission, claiming that it was selling tickets too cheaply and being anti-competitive. That case was dismissed in favour of FlySafair.
FlySafair is seeking legal clarity and has urged the Minister of Transport to intervene.
“Any concerns could be resolved without grounding flights,” says Kirby Gordon, FlySafair’s chief marketing officer. Critics of the Council’s decision are calling for a more rational approach to avoid unnecessary harm to South Africans and the country’s economy.
“Even if we are in the wrong, there’s nothing here that cannot be remedied after the fact. There’s no reason that South Africans should be harmed.
The Air Services Licensing Council is set to communicate its decisions and sanctions in the coming days.