By Lehlohonolo Lehana.
The Air Services Licensing Council (ASLC) has reaffirmed that the foreign ownership structure of FlySafair is non-compliant with local laws, the airline confirmed in a statement.
The carrier slammed the decision, saying it could have “catastrophic” consequences for the airline industry at large.
The potential repercussions of this ruling are catastrophic, said Kirby Gordon, Chief Marketing Officer of FlySafair.
“It could cripple the aviation and tourism sectors, leading to reduced flight options, job losses, and economic damage.”
In November, the airline received notice that its ownership structure was non-compliant with nationality provisions under the International Air Services Licensing Act.
“The Council has issued a ruling that calls into question the compliance of numerous airlines with the Air Services Licensing Act, specifically regarding ownership requirements, ” read the statement.
“The crux of the matter lies in the interpretation of the Act’s provision mandating that 75% of an airline’s voting rights must be held by ‘Residents of the Republic’. The ASLC’s stance is that this means that airlines must have individual (natural person) shareholders, effectively excluding trusts and companies – a common ownership structure in the industry. Ignoring the fact that most individuals do not have the capital or resources to own an airline, this interpretation potentially renders the majority of South African airlines non-compliant, including major players like Airlink and SAA.”
FlySafair is a central figure in this dispute and is adamant that the ASLC’s interpretation is not only overly restrictive but also contradicts established legal precedent. “FlySafair has therefore taken proactive steps to address the ambiguity in the Act by seeking a declaratory order from the courts. This legal action aims to provide clarity and guidance for the entire industry, albeit that the ASLC has opposed this process.”
“FlySafair remains committed to resolving this issue constructively and advocating for a sensible interpretation of the Act that supports the growth and sustainability of the South African aviation industry. The airline is hopeful that the Minister of Transport will take decisive action to steer the process toward a positive outcome, concluded the statement.”
The department of Transport confirmed receipt of the correspondence on Tuesday.
“The request is currently being considered by the departmental legal services, taking into account the regulatory environment,” the department stated.
Meanwhile FlySafair said that it welcomed the opportunity to “provide clarity” on the overbooking, saying it remains confident that its policies and practices are compliant with the Consumer Protection Act (CPA) and “among the most transparent and consumer-focused in the industry.”
The airline said that it believes that it is crucial that the investigation be conducted fairly and contextually.
“Overbooking is not unique to FlySafair; it is a standard and globally accepted practice employed by airlines to manage operations efficiently, mitigate the financial impact of no-show passengers, and keep air travel affordable,” said FlySafair.
“This practice has been used by all local airlines, past and present, as well as international carriers selling tickets to South African consumers,” it added.