SA airlines see fastjet as domestic threat

2013-01-23 11:53

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South Africa’s largest airlines are formally objecting to the threat posed by UK-based fastjet’s attempts to enter the local market by taking over the operations of 1time, which is in provisional liquidation.

BDLive reports that the Air Services Licensing Council will meet next month to hear arguments for and against the transfer of 1time’s licence to fastjet.

In order to win regulatory approval for its acquisition of 1time, fastjet has applied to Transport Minister Ben Martins for an exemption to the Air Services Act, which requires that 75% of the shareholding of the licence holder is held by South African residents. The act gives the minister the power to exempt operators from this requirement.

State-owned airline Mango sent its affidavit to the council, objecting to the transfer stating a “high probability (existed) of other domestic airlines, with capital commitments on replacement and new aircraft, defaulting if fastjet entered the market. It would lead to an increase in the general credit risk for South African-based and state-owned airlines as a whole", which would make obtaining financing difficult.

Mango is a subsidiary of South African Airways (SAA), which is relying on a R5bn state guarantee to continue operating, and plans to acquire 20 new Airbus A320s.
Comair CEO Erik Venter said on Tuesday that the airline, which operates British Airways flights and low-cost operator, had also filed objections at the Air Services Licensing Council to fastjet’s licence application.

Despite the fears that Mango raised in its affidavit to the council, the airline issued a statement congratulating itself for filling the gap left by 1time’s demise, which gave it "the best year-end holiday season since inception".

Mango also provided details of its intentions to expand routes this year — mirroring fastjet’s plans.

1time’s provisional liquidator, Aviwe Ndyamara, confirmed other airlines had objected to the application but has decided not to comment further on the matter.

Read more on:    1time  |  mango  |  fastjet  |  kulula  |  flights  |  travel south africa  |  aviation

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