No great risk of FlySafair being grounded over foreign shareholding issue, says aviation analyst

Safair, parent company of low-cost passenger airline FlySafair, is under investigation because of its shareholding arrangement.

Competitors have complained that Safair may be in breach of South Africa's domestic ownership minimum thresholds - two lodged complaints with the International Air Services Council (IASC), and one of them also with the local Air Services Licensing Council (ASLC).

The Air Services Licensing Act requires that domestic license holders have a minimum of 75% local shareholding.

The International Air Services Act, which governs SA-domiciled airlines that fly internationally, requires "substantial" local shareholding. News24 reports that this has been taken by the industry to mean at least 50%.

FlySafair has captured 60% of the domestic air travel market, and in January was named the best and most on-time low-cost airline in the world.

Is there a real possibility that the carrier could be grounded, and what would it mean for the local industry?

Bruce Whitfield gets comment from aviation analyst Guy Leitch, editor of SA Flyer Magazine.

Leitch notes that a similar objection launched around ten years ago was put to rest at the time.

The issue flared up again because of a structural change by the Irish shareholders when they wanted to buy Joburg-based Airlink about four years ago at the beginning of the pandemic, he says.

Leitch explains why he feels using this as the basis for the new complaints is 'pretty weak'.

"They restructured their shareholding, which then appeared in the annual report of the Irish company. Now, literally two or three years later, Rodger Foster and Gideon Novick of Lift Airlines have jumped on this."

Guy Leitch, Editor - SA Flyer Magazine

Leitch reports that in his communications with FlySafair, they said the Irish company's annual report is incorrect and they just haven't yet fixed it.

Presumably, once again the whole issue will just be shown to be pretty much a damp squib, he remarks.

"FlySafair have done an incredibly good job... I think it's the tall poppy syndrome here - the competitors are envious of their success and are taking a shot at it."

Guy Leitch, Editor - SA Flyer Magazine