FlySafair has been given 12 months to comply with the domestic regulator’s ruling on its ownership structure, alleviating concerns that the low-cost carrier might be forced to ground its operations until the issue was resolved.
South Africa’s National Department of Transport confirmed on 5 February that the country’s Air Services Licensing Council (ASLC) had made the ruling in January, after establishing in December last year that FlySafair does not meet the requirement for 75% of its voting rights to be held by South African citizens who are resident in the country.
“The Council’s decision has effectively given an opportunity for [Flysafair] to remain in the skies while fixing its compliance matter,” the transport ministry says.
In response to the development, FlySafair says it is considering whether to proceed with shareholder adjustments or to take legal action against the ruling.
FlySafair is 25% owned by Safair Holdings – which is owned by Ireland-based ASL Aviation Holdings – 50% by Safair Investment Trust and 25% by an employee share scheme.
The issues surround ownership of the trust, which the ASLC ruled in December does not meet requirements around voting rights being held by resident citizens, with regulators previously suggesting the trust is ultimately owned by ASL Aviation Holdings.
Investigations by South Africa’s domestic and international regulatory bodies into FlySafair’s ownership began when other local carriers raised concerns with regulators.
The latest development is unrelated to a separate investigation by South Africa’s international aviation regulator. The local ownership threshold for international flights is lower than for domestic operations, however.
FlySafair operates a fleet of around 35 Boeing narrowbodies on domestic and international routes.
South Africa’s airline market has seen much turmoil in recent years, with a drastically smaller South African Airways going through a protracted privatisation process and carriers such as Mango and Comair ceasing flights.
