Sanctions expected ‘within days’.
FlySafair’s hope that Minister of Transport Barbara Creecy will intervene in a dispute with the regulator, which could cost the airline its operating licence, has been dashed after she informed it that its request is premature.
The airline, which holds 60% of the domestic air travel market, asked Creecy to exempt it from certain provisions of the Air Services Licensing Act pending the finalisation of two applications it is bringing in the high court.
FlySafair asked for a declaratory order regarding the interpretation of the limitation that at least 75% of the company voting rights of a licensee must be resident in South Africa.
ALSO READ: FlySafair says its ‘non-compliance’ applies to almost all SA airlines
Complaint by competitor
The Air Services Licensing Council, which regulates the domestic aviation industry, and its international counterpart, found FlySafair to be non-compliant with the provision, following a complaint by rival Global Aviation, operator of Lift Airline.
In the reasons for its decision, the domestic council argued that only natural persons can be “resident” in terms of the South African Citizenship Act of 1995, and therefore the voting rights must be held by warm-bodied persons, not companies or trusts.
In FlySafair’s case, 75% of its voting rights are held by a trust and, by this interpretation, it would be non-compliant on that front as well.
The airline called the council’s interpretation “highly unique and irregular in the context of global aviation with almost no examples of similar legislation existing in other countries around the world”.
It says companies incorporated in South Africa should also be regarded as “residents” and if the council’s interpretation holds, most other local airlines will be equally non-compliant, including Airlink and SAA, the latter being state-owned.
Airlink has denied any non-compliance.
FlySafair voiced its intention to take the council’s finding on review in the high court and hoped that Creecy would exempt it until this application has also been finalised.
ALSO READ: FlySafair’s future up in the air: Bid to keep airline flying
DoT ‘still considering’ matters
The Department of Transport said in a statement on Thursday that Creecy has notified FlySafair that its request is premature.
“The minister sought legal advice from the legal section of the department, which established that the last meeting between the council and Safair was as recently as 14 January 2025.
“In the meeting, Safair and the complainant, Global Aviation Operations (Pty) LTD, were given an opportunity to make oral representations for mitigation and aggravation.
“The council is still considering all submissions and presentations made and will decide on this matter in due course,” the statement reads.
“The minister has further instructed the department to seek legal advice from the senior counsel regarding the airline’s application for ministerial exemptions within the context of the processes that are currently unfolding.
“It must, therefore, be noted that it is not a forgone conclusion that the council will simply just cancel Safair’s licence,” it adds.
“The council has a legal requirement to notify Safair of its final decision. Section 25 of the Act also provides that any person who feels aggrieved by the refusal or decision of the council may appeal the decision to the high court.
“This, therefore, means that due processes should be followed and concluded. The Council should eventually pronounce on its final determination. Safair can thereafter exercise its right to appeal if it feels aggrieved by the final decision of the council.”
FlySafair acknowledged the statement and said: “We await further advice from the relevant parties.”
ALSO READ: ‘No immediate threat to operations. We will fly as normal’, says FlySafair
Looming sanctions, grounding?
Moneyweb has learnt that the council may impose sanctions on FlySafair within days, including the suspension of its operating licence, which will result in grounding the airline.
This may be temporary until the council is satisfied that the airline is in compliance or may require FlySafair to reapply from scratch before it can resume operations.
There may be a final notice period to give FlySafair a final opportunity to comply, in the council’s view, before the sanctions take effect.
During proceedings Lift argued that this should be limited to 30 days.
The airline has warned that grounding it would result in irreparable harm for itself and chaos within the local air travel industry because of the lack of capacity of other airlines to absorb its passengers.
This, it said, could put the upcoming Mining Indaba in Cape Town in jeopardy. The event is expecting 10 000 participants from all over the country and international destinations.
FlySafair is expected to file its court papers shortly after receiving the council’s sanction notice.
This article was republished from Moneyweb. Read the original here.
