FlySafair grounded by competition

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New low cost carrier FlySafair has been grounded after the North Gauteng High Court granted an interdict preventing it commencing flights on October 17 as planned. FlySafair’s competitor Comair applied for the interdict based on ownership rules for South African airlines.

In a statement, FlySafair CEO Dave Andrew apologised to customers who had already bought tickets and said that passengers are guaranteed that their money will be refunded. “Having had time to study the interdict, we have made the decision to cancel all bookings and refund all passengers for tickets booked, starting with the most imminent flights and doing it as quickly as possible.”

Andrew said the court yesterday ordered Comair to accommodate FlySafair’s passengers by honouring their ticket prices and dates of travel as was booked and agreed to with FlySafair. “Comair is further instructed do this at no extra charge to the passenger,” he said in the statement. Judge Neil Tuchten also ordered Comair to bring the outcome of the court order to the public’s notice. Comair will now have to accommodate an extra 2 000 to 2 500 passengers who bought FlySafair tickets.

Andrew noted that the court interdict was unfortunate and “contrary to our expectations” and prohibits FlySafair from starting operations “until such time that the Air Services Licensing Council’s decision to grant Safair the scheduled license has been reviewed by the court.”

Comair, in its objection to FlySafair, said the new carrier is owned by Irish group ASL Aviation and that the three South African directors with 75% of the voting rights are fronting for the company, which would be in violation of South African law that states that foreign entities may not own more than 25% of a domestic airline. Comair said director Hugh Flynn did not normally reside in South Africa as claimed by FlySafair.

Andrew has firmly denied such charges, saying that parent company Safair Operations has a 75% South African shareholding, which is in line with the Air Services Licensing Act. The other 25% of voting rights are held by Safair Operations Ireland, owned by ASL Aviation.

Tuchten said it appeared FlySafair was controlled by its Irish, and ultimately Belgian, owners. “In my view there is a strong probability that Safair is both commercially and legally obliged to defer to and implement any decisions made by its holding companies in relation to Safair’s proposed operation…and that Safair will thus not be in effective control of the proposed new enterprise.”

Comair was joined in its interdict application by 1time founders Glenn Orsmond and Rodney James, who, together with Johan Borstlap, are planning to launch low cost carrier Flywise later this year.

Further competition in the South African airline arena may come from FastJet, which had originally planned to begin flying between Dar es Salaam, Tanzania, and Johannesburg in September. This was postponed to October and has now been delayed again.

In August FlySafair announced it would offer up to ten flights a day between the key hubs of Cape Town and Johannesburg, using two Boeing 737-400 aircraft. The airline said it saw a gap in the market after the demise of 1time and Velvet Sky pushed the prices of airline tickets up, causing a drop in domestic traffic. “FlySafair has increased the number of cheap tickets in the domestic market and…we’ve driven the general prices in the industry down,” Andrew said in the statement yesterday.



He added that the FlySafair board is “considering all available options as we remain dedicated to the launch of FlySafair,” and urged customers to keep an eye on the skies as the carrier is committed to resolving the issue.