FlySafair, one of South Africa’s leading low-cost carriers, is at the centre of a regulatory dispute that could potentially ground its operations indefinitely.
FlySafair and ASLC clash over ownership compliance
The Air Services Licensing Council (ASLC) alleges that the airline’s ownership structure violates South African laws capping foreign ownership at 25%.
The ruling, announced on Tuesday, 14 January 2025, could have far-reaching consequences for the nation’s aviation industry and broader economy.
According to reports, the controversy stems from FlySafair’s majority ownership by Ireland-based ASL Aviation Holdings, which holds a 74% stake.
South African aviation regulations mandate that 75% of a domestic airline must be owned by natural persons residing in the country, a criterion FlySafair reportedly fails to meet.
If the ASLC’s decision is enforced, FlySafair’s operating license could be revoked, potentially causing widespread disruptions to domestic air travel.
Implications of the ownership conflict
The ASLC ruling poses significant risks to South Africa’s aviation industry.
FlySafair alone accounts for 87% of domestic airline seat capacity, and its grounding would severely impact connectivity, tourism, and business travel.
The ripple effects could extend beyond FlySafair, as other carriers, including Airlink (25% owned by Qatar Airways) and state-owned South African Airways (SAA), might also face scrutiny over their compliance with the same regulations.
FlySafair has obtained a legal injunction to prevent immediate enforcement of the ASLC ruling, buying time to challenge the decision.
The airline has called for a judicial review to clarify the interpretation of South Africa’s aviation ownership laws.
Enforcing the ASLC’s ruling could exacerbate challenges facing South Africa’s aviation sector. Domestic air travel plays a vital role in supporting tourism, which contributes significantly to the country’s GDP.
A grounding of FlySafair could result in higher airfares, reduced travel options, and losses for businesses relying on air logistics.