Storm brewing for FlySafair in South Africa

South Africa’s low-cost airline, FlySafair, is currently facing significant challenges related to its shareholding structure and a potential strike by its workforce.

The International Air Services Council (IASC) recently ruled that FlySafair’s ownership arrangement does not comply with South African law, putting the airline at risk of sanctions that could impact its operational capabilities.

The inquiry into FlySafair’s shareholding dates back to October 2022 and was prompted by complaints from Airlink and Global Aviation, the latter operating as LIFT.

These complaints, filed with the IASC in February, raised concerns about FlySafair’s compliance with the legal requirement that limits foreign ownership of a South African airline to a maximum of 25%.

According to information provided in its annual financial statements, Ireland-based ASL Aviation Holdings holds the majority stake in FlySafair.

ASL owns 74.86% of the airline through one of its subsidiaries, suggesting that FlySafair’s majority ownership resides outside of South Africa.

This ownership configuration has raised red flags, especially considering that FlySafair did not seek to amend its air service license when it was restructured in March 2019.

The IASC has indicated that it will announce a sanction soon, which could include suspending FlySafair’s license or imposing fines, forcing the airline to reassess its shareholding structure to remain compliant with local laws, according to reports.

In response, FlySafair told BusinessTech that it was committed to adhering to regulatory standards and complying fully with the law.

The airline emphasised its dedication to transparency, noting that it has consistently cooperated with regulators to ensure its shareholding and control mechanisms are well-documented.

FlySafair highlighted its commitment to operating domestically, with a team firmly based in South Africa and a mission to deliver safe, affordable services to South African customers.

Additionally, the airline acknowledged the regulatory ambiguity contributing to this compliance issue, indicating its willingness to work with authorities to clarify and align its structure with legal requirements.

FlySafair has expressed confidence that open dialogue and cooperation will resolve these challenges swiftly, assuring customers and stakeholders that the current situation has no immediate impact on its operations.

The airline said that it is “business as usual” while it addresses the IASC’s concerns, affirming its values of safety, transparency, and accountability as it works toward a resolution.

Looming strike

In another challenge for FlySafair, a potential strike looms as trade union Solidarity has announced its intent to seek a strike certificate, reported the Citizen.

This strike, supported by 93% of its members, would respond to a new rostering system that FlySafair plans to implement in February. This change has caused considerable dissatisfaction among crew members.

Solidarity’s leadership expressed frustration over the airline’s decision to move forward with the rostering changes despite ongoing consultations with the union.

In a statement, the union reiterated its willingness to negotiate alternative solutions but underscored its duty to represent the interests of its members if necessary action is required.

FlySafair has refrained from publicly commenting on the union dispute.

A representative told BusinessTech that the airline would issue a formal statement if necessary, underscoring the complexity of the situation and the uncertainty surrounding the potential for a strike.

Together, these issues paint a challenging picture for FlySafair, an airline striving to maintain regulatory compliance and operational stability while navigating complex labour relations in a highly competitive market.

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