A South African low-cost airline faces legal challenges due to its non-compliant ownership structure, potentially disrupting air travel across the country.
FlySafair, a popular low-cost South Africa n airline, is currently embroiled in legal disputes due to its ownership structure. The Air Services Licensing Council (ASLC) has determined that the airline is non-compliant with domestic licensing regulations, a finding that could jeopardize its operations and significantly disrupt air travel. The crux of the issue lies in FlySafair's shareholding structure, which does not adhere to South Africa n law.
This law restricts foreign ownership of domestic airlines to 25%. However, FlySafair is primarily controlled by Ireland-based ASL Aviation Holdings, which holds a 74.86% stake, substantially exceeding the legal limit.FlySafair contends that the interpretation of the law, which mandates that 75% of an airline's voting rights be owned by South African residents, is problematic. They argue that the ASLC's stance, requiring individual shareholders and excluding trusts and companies, is unrealistic as most individuals lack the financial resources to acquire an airline. This interpretation, according to FlySafair, could cast doubt on the compliance of other local airlines, including Airlink and SAA, with the Air Services Licensing Act.In response to the ASLC's ruling, FlySafair has appealed to Transport Minister Barbara Creecy to intervene. They request an exemption from the relevant legal provisions until the conclusion of their court application for a declaratory order and their judicial review of the council's non-compliance finding. Failure to secure this exemption could result in the suspension or revocation of FlySafair's operating license, effectively grounding the airline. With a commanding market share of approximately 60% and an impressive daily capacity of up to 160 flights carrying 30,000 passengers, the grounding of FlySafair would be a calamitous event, not only for the airline itself but also for the thousands of passengers who would be stranded due to the limited capacity of other airlines to accommodate them
Flysafair Air Services Licensing Council Foreign Ownership Airline Regulation South Africa
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