Flight price warning for South Africa as FlySafair suffers major blow

FlySafair may be grounded after the Air Services Licensing Council (ASLC) confirmed its shareholding violates local laws. The airline warns this could lead to higher flight prices and harm the industry.
The Air Services Licensing Act requires domestic airlines to have at least 75% of their voting rights owned by South African residents.
Currently, FlySafair’s majority shareholder is the ASL Aviation Group, an Irish holding company, which owns 74.86% of the airline—a fraction shy of the legal threshold.
This has placed FlySafair in breach of both South African and international air services licensing regulations. The controversy stems from complaints lodged by competing airlines.
These complaints prompted an inquiry launched in October 2022, leading to rulings that confirmed FlySafair’s non-compliance.
The ASLC has reaffirmed this position, interpreting the law to require individual (natural person) shareholders for compliance, effectively excluding corporate entities and trusts.
FlySafair argues this interpretation is impractical, as few individuals possess the capital required to own an airline.
The airline has warned that this strict reading of the law could also jeopardise the compliance of other major carriers.
If FlySafair is grounded, the impact would ripple across South Africa’s aviation and travel sectors.
The airline, which commands approximately 60% of the domestic market and operates up to 160 flights daily, transports about 30,000 passengers each day.
The sudden removal of this capacity would overwhelm other carriers, leaving passengers stranded and creating a significant bottleneck in air travel.
With limited alternative options, ticket prices are likely to surge, placing additional financial strain on consumers and potentially reducing access to affordable travel.
This scenario could also deter tourism, stifling an industry already recovering from pandemic-related disruptions.
FlySafair’s potential suspension has also raised concerns about broader economic consequences.
The airline warned of potential job losses and long-term damage to South Africa’s aviation sector, which is critical to the country’s connectivity and economic growth.
A decline in competition could lead to reduced flight availability and higher operational costs across the industry.
Tourism, a key driver of South Africa’s economy, could suffer significantly if affordable and reliable domestic flights diminish.
To address the issue, FlySafair has initiated legal action seeking a declaratory order from the courts to clarify the interpretation of the ownership laws.
The airline has also written to Transport Minister Barbara Creecy, requesting an exemption from the contentious legal provisions while its court applications are under review.
The minister’s office has acknowledged receipt of the request, stating it is being assessed in consultation with legal advisors and the broader regulatory framework.
FlySafair remains optimistic that the minister’s decisive intervention could resolve the situation, emphasising the need for a sensible interpretation of the law that supports the sustainability and growth of South Africa’s aviation industry.
The ASLC’s ruling threatens FlySafair and sets a precedent that could disrupt the operations of other airlines.
If the council’s stance is upheld, the aviation industry—already operating in a challenging economic environment—could face significant instability. Airlines might be forced to restructure ownership to comply with the law, a process that could be time-consuming and costly.
FlySafair’s predicament underscores the urgent need for regulatory clarity to safeguard the stability of the aviation sector.
The current uncertainty has created a cloud over the industry, with potential ramifications extending far beyond one airline.