The domestic Air Services Licensing Council (ASLC) has ruled that low-cost carrier, Flysafair, was in contravention of foreign ownership threshold in the domestic market.

This is a similar ruling made by the international Air Services Licensing Council late last year, which threatened to ground all of the airline’s international flights but was prevented by FlySafair obtaining a court interdict.

A decision on the domestic matter could be protracted as Flysafair has approached Transport Minister Barbara Creecy for intervention, requesting for exemption from the relevant legal provisions until its court application for a declaratory order and its court review of the council’s finding of non-compliance have been finalised.

Flysafair, which is owned by Safair, appeared before the Domestic Air Services Licensing Council yesterday for submissions following last month’s findings.

“After investigating the matter and having applied itself after representations by the complainant (Global) and the respondent (Safair), Council found that Safair does not comply with Section 16(4)(c)(ii) and (d) of the Air Service Licensing Act (Act No. 115 of 1990),” it said.

“Council also found that Safair does not comply with Section 19, read together with Section 16(4) of the Act. Following these findings, the ASLC invites representatives of Safair to a follow-up meeting for aggravation and mitigation.”

According to company records, Safair’s company structure comprises 49.86% shareholding by the Safair Investment Trust, which is one of three shareholders of Safair, which is eventually 100% owned by Irish firm, ASL Aviation Holdings.

This is additional to the 25% shareholding that is also eventually owned by ASL Aviation Holdings, making the total shareholding of Safair by ASL to 74.86%, a contravention of foreign ownership restrictions.

ASL effectively holds 74.86% in Safair through Safair Investment Holdings.

BUSINESS REPORT