Comair challenges new low-cost airline

2013-09-05 08:54

Johannesburg - In the wake of FlySafair's announcement that they would become South Africa's newest low-cost airline, Comair has objected to the Air Services Licensing Council granting them a domestic passenger service license. 

BDLive reports that Comair CEO Erik Venter objects to the freight and charter operator Safair applying for a scheduled passenger service license under the name FlySafair as they do not meet the required 25% limit of foreign ownership. 

According to Safair CEO Dave Andrew 75% of the company is held by three South Africans, who also happen to be directors. They include Chairperson Hugh Flynn and Chief Financial Officer Elmar Conradie as well as Andrew. 

Despite the Safair website noting that the company is ‘part' of the Dublin-based ALS Aviation Group, all South African shareholders have voting rights and are entitled to receive dividends.

Comair said they would object to the license on two grounds - the first being that Flynn is not ‘normally resident' in South Africa, as he's based in Ireland, which would mean that FlySafair would fail the 25% foreign ownership limit test. Secondly they will argue that Safair was a ‘front' formed to enter the local domestic market. 

Comair head of regulatory affairs, Kim Gorringe, said there were "inconsistencies" in documents, including the FlySafair management plan submitted to the licensing council by Safair. He said that in some of the documents ALS was referred to as the 100% shareholder.

Andrew said Safair was not a subsidiary of the ALS, but rather an associate company.

Venter said Comair was preparing two objections. The first was an objection to the licensing council over the granting of the license, and the second was a possible high court interdict against FlySafair. 

Andrew said Comair's actions were motivated by fear of competition.

In an official statement regarding Comair's objection, Safair confirmed that they agree with the concept of a deregulated and competitive domestic airline industry where all airlines are required to comply with the applicable aviation legislation and to compete fairly and equally with one another for market share.

They confirmed once again that FlySafair has a 75% South African shareholding, in accordance with the Air Services Licensing Act and that the remaining 25% of the voting rights in Safair Operations (Pty) Limited is owned by Safair Aviation Ireland Limited, which in turn is wholly owned by the Irish ASL Aviation Group.

"I believe that it is also pertinent to reiterate that Safair has had a 75% South African shareholding since 2009. No organisation or individual has ever questioned this structure before, so it is surprising that Comair Limited is raising objections now that we have announced the launch of a low cost competitor, which will naturally challenge its kulula operation," says Dave Andrew, CEO of Safair.

Regarding the objection to Flynn being considered a South African shareholder, the company says due to his long association with Safair and its various divisions and associated companies, Flynn has held various senior positions within the company which has allowed him to travel extensively. He has spent time in several countries outside of South Africa, including more recently, in Ireland. However, he is South African born and bred. 

He added that the South African shareholders and board of directors offer a wealth of aviation expertise, which contributes to the vast experience offered by the company as a whole. With almost half a century’s aviation experience, along with Safair’s world class track record of excellence and respect in the global aviation industry, FlySafair is perfectly positioned to embark on this new journey.

FlySafair has been very active on social media and don't seem to shy away from bearing their teeth

Read more on:    flysafair  |  comair  |  travel  |  travel south africa  |  flights  |  air travel

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