Comair challenges FlySafair's licence

[Ockie]

BARELY a day after FlySafair announced it would become South Africa’s newest low-cost airline, its plans are under threat from listed airline group Comair — which has objected to the Air Services Licensing Council granting the privately owned FlySafair a domestic passenger service licence.
In the past year, as many as four new low-cost airlines have proposed starting a service between Johannesburg and Cape Town to take the gap in the market created by the collapse of Velvet Sky and 1time Airline.
Comair CEO Erik Venter said on Wednesday the company had raised its objections to the licensing council when Safair applied for a scheduled passenger service licence under the name FlySafair. Mr Venter alleged that the airline did not meet the requirement of a 25% limit on foreign ownership.
FlySafair is the low-cost brand that has been established by freight and charter operator Safair, according to Safair CEO Dave Andrew. Safair has been operating in South Africa for more than 40 years, largely in the freight and charter business, according to its website.

Mr Andrew said 75% of Safair is held by three South Africans, who also happen to be directors of the company. The directors include Safair chairman Hugh Flynn, chief financial officer Elmar Conradie and Mr Andrew.
All three South African shareholders have voting rights and are entitled to receive dividends, he said. According to the Safair website, the company is "part" of the Dublin-based ALS Aviation Group.
Comair head of regulatory affairs Kim Gorringe said the carrier would object to the licence on two grounds. The first was that Mr Flynn was not "normally resident" in South Africa, that while he travelled to South Africa regularly, his home was in Ireland.
If true, as alleged by Comair, FlySafair would fail the test for a limit of 25% on foreign ownership, Mr Gorringe said.
In the second instance, Comair claimed that Safair was a "front" formed to enter the South African domestic market, Mr Gorringe said. He referred to "inconsistencies" in documents, including the FlySafair "management plan", submitted to the licensing council by Safair.

In some of the documents, ALS was referred to as the 100% shareholder of Safair, Mr Gorringe said. This was referenced in ALS financial statements submitted to the Belgian stock exchange and also on Safair’s website, he said. The reference has since been removed from the website, Mr Gorringe said.
Mr Andrew said Safair "acknowledged" that it had made mistakes in its submission to the licensing council, and after Comair’s objection had answered all questions to the satisfaction of the licensing council.
The mistake had lingered on its website after the takeover of Safair by Ireland-based Aergo Capital in 2008 from Imperial Holdings, Mr Andrew said. Aergo sold its 25% stake to ALS last year, according to Safair’s website.
Mr Andrew said Safair was not a subsidiary of the ALS, but rather an associate company.

Mr Venter said Comair was preparing two objections. The first was an objection to the licensing council over the granting of the licence, and the second, being prepared in parallel, was a possible interdict against FlySafair, which Comair will seek from the high court. Comair would ask the court to set aside and review the granting of the licence to FlySafair in the event that the council did not respond to Comair’s objections by withdrawing the licence.
Mr Andrew said Comair’s actions were motivated by fear of competition.
"These objections were raised to our submission which was lodged in May. We responded to all the objections Comair made and the council reviewed (that) and under review they agreed to grant us the licence. We have answered them and we believe we are compliant," he said.

http://www.bdlive.co.za/business/transport/2013/08/29/comair-challenges-flysafairs-licence


Maybe this is a knee jerk reaction ... and perhaps Comair have got a leg to stand on .... but I say ... stop being a little bitch and trying to stiffle competition entering the market. I think Kulula got used to the nice new high prices since 1Time went bust and now they dont want to let go of that and compete.

What do you guys think?

 

[Albereth]

http://www.bdlive.co.za/business/transport/2013/08/29/comair-challenges-flysafairs-licence


Maybe this is a knee jerk reaction ... and perhaps Comair have got a leg to stand on .... but I say ... stop being a little bitch and trying to stiffle competition entering the market. I think Kulula got used to the nice new high prices since 1Time went bust and now they dont want to let go of that and compete.

What do you guys think?

I think you're spot on.

 

[OMB]

I remember when Kulula entered the market they were really competitive, but over the years they just got more and more expensive, I stopped using them and switch to 1Time (when they were still around) and Mango

I've noticed recently, having been forced back to using Kulula at times seeing as 1Time have gone, that you can book a Kulula flight and end up flying BA, so they seem to be diluting Kulula's identity.

 

[Compton_effect]

Is there a market for another regional airline?
Its not like they can drop the costs much more.

 

[Ockie]

I remember when Kulula entered the market they were really competitive, but over the years they just got more and more expensive, I stopped using them and switch to 1Time (when they were still around) and Mango

I've noticed recently, having been forced back to using Kulula at times seeing as 1Time have gone, that you can book a Kulula flight and end up flying BA, so they seem to be diluting Kulula's identity.

That happened to me once .... but they do that when the Kulula flight is overbooked. They will put you on a BA flight because they operate BA also so rather than paying the fare to another operator the dosh stays withing the Comair group. Definately not diluting the identity I think ... they renewed their fleet etc ... if the dilute it it woudl be a big mistake I think.

 

[Ockie]

Is there a market for another regional airline?
Its not like they can drop the costs much more.

Well ... it depends on how you look at it. Most of the airlines that have wanted to launch say that there is space indeed. Also ... since 1Time left and prices went up ... the SA market have actually contracted due to the higher prices. Once another player enters and prices comes down once more ... the industry can grow again as the market grows and people take to the skies again due to it being more affordable. As they say .... build it and they will come .... or something like that.

 

[Compton_effect]

That happened to me once .... but they do that when the Kulula flight is overbooked. They will put you on a BA flight because they operate BA also so rather than paying the fare to another operator the dosh stays withing the Comair group. Definately not diluting the identity I think ... they renewed their fleet etc ... if the dilute it it woudl be a big mistake I think.

I prefer flying Kulula out of OR Thambo. Most of the time you end up on a BA flight - overall a much better flight.

 

[Ockie]

I prefer flying Kulula out of OR Thambo. Most of the time you end up on a BA flight - overall a much better flight.

I did not find it all that different really. Only thing that was nice was getting breakfast. Also ... BA planes are terribly old and dingy. Not saying they are unsafe .... they are not ... but they look k@k

 

[OMB]

That happened to me once .... but they do that when the Kulula flight is overbooked. They will put you on a BA flight because they operate BA also so rather than paying the fare to another operator the dosh stays withing the Comair group. Definately not diluting the identity I think ... they renewed their fleet etc ... if the dilute it it woudl be a big mistake I think.

tried booking a flight on the kulula website recently? this is what you get.

 

[sox63]

http://www.bdlive.co.za/business/transport/2013/08/29/comair-challenges-flysafairs-licence


Maybe this is a knee jerk reaction ... and perhaps Comair have got a leg to stand on .... but I say ... stop being a little bitch and trying to stiffle competition entering the market. I think Kulula got used to the nice new high prices since 1Time went bust and now they dont want to let go of that and compete.

What do you guys think?

I would support Comair on this one. They have to play by the same regulatory rules, so why must they sit by and watch as a new player flouts them?

Does a SA citizen give up their citizenship if they reside elsewhere? I dont remember seeing that though...

 

[Ockie]

I would support Comair on this one. They have to play by the same regulatory rules, so why must they sit by and watch as a new player flouts them?

Does a SA citizen give up their citizenship if they reside elsewhere? I dont remember seeing that though...

According to the article what Comair is bitching about was brought up with the council and FlySafair answered them accordingly and thus the license was granted. Comair taking this so far reeks of desperation and spitefulness. I could be wrong but that is how I see it.

 

[Ockie]

tried booking a flight on the kulula website recently? this is what you get.

mmmm interesting ... .thanks meneer. I wonder why they do that. I also wonder why they even do the BA brand still to be honest. Do away with it.....and stop paying royalties to BA and grow your own already strong Kulula brand.

 

[Nerfherder]

That happened to me once .... but they do that when the Kulula flight is overbooked. They will put you on a BA flight because they operate BA also so rather than paying the fare to another operator the dosh stays withing the Comair group. Definately not diluting the identity I think ... they renewed their fleet etc ... if the dilute it it woudl be a big mistake I think.

Its not when its over booked... its when the Kulula flight is underbooked and they have enough space on the BA flight.

Its frikken awesome when they bump you up to BA... more space, free meal, free drinks.

I only fly Kulua, Mango and 1Time were not worth the hassles.

 

[Ockie]

Its not when its over booked... its when the Kulula flight is underbooked and they have enough space on the BA flight.

Its frikken awesome when they bump you up to BA... more space, free meal, free drinks.

I only fly Kulua, Mango and 1Time were not worth the hassles.

The reason I was given when bumped upt to BA was that the Kulula flight was over booked. Over booking is pretty much a normal industry thing.

Cant say I have ever had a problem with 1Time. Were always on time for me etc. Only bad thing I know about them personaly is they lost my then boyfriends baggage once. They found it later that night and delivered it to us same night and gave him a free flight.

 

[sox63]

According to the article what Comair is bitching about was brought up with the council and FlySafair answered them accordingly and thus the license was granted. Comair taking this so far reeks of desperation and spitefulness. I could be wrong but that is how I see it.

I think perhaps the council was satisfied with the definition of resident in South Africa, where a court might decide something else. This challenge will be a precedent setting one IMO, as a LOT of SA business people reside elsewhere, but continue to do business here. If the court finds in favor of Comair, this will go all the way to the ConCourt as a lot of execs will now no longer be "South African"...

 

[Ockie]

Kulula just tweested : @john_schippers1 - Any competition is good competition

WTF Kulula.

 

[Ockie]

Listened to the CEO of Comair interview with 702 and he just kept on saying that if foreingers wants to come and open a airline here ... then other countries must allow us to do the same. By the looks of things ... this have already been brought up with the council ... FlySafair responded and answered the questions and it was determined that the airline is 75% South African owned and therefore the licence was granted.

I could be wrong ... but Kulula guy sounded like he knew he has got not fcking other good reason why they being a little bitch about this and trying to stifle competion and therefore the only thing he could come up with was " uh ja but erm if other countries wants to come here and take our business then they must allow us to do the same you know blah blah blah" .

 

[Ockie]

FlySafair license is safe

Booking for FlySafair’s first domestic services are to open this month after the Air Services Licensing Council dismissed objections last week.
Owned by Safair and the Irish ASL Aviation Group, the airline intends to serve Johannesburg and Cape Town with up to 10 daily flights utilizing two Boeing 737-400s. Although schedules are yet to be confirmed, operations are expected to launch by the last quarter of this year.

Its plans came under threat last week when Comair alleged the airline did not meet the requirement of a 25 percent limit on foreign ownership.
But Safair launched a vigorous defence against the claims, to the satisfaction of the Department of Transport.

“The council sat and adjudicated that there was no basis to refuse the application… everything has been satisfied,” noted Deputy Director: Licensing & Permits, Andries Ntjane,
Comair Chief Executive, Erik Venter, said there were no immediate plans to pursue legal action to see the ASLC’s ruling reviewed but feared the move could set a precedent for other foreign-owned airlines looking to enter the market.
Chief Executive Officer of Safair Operations and FlySafair, Dave Andrew, said he was relieved the matter appeared resolved and that the final phase of launch preparations were underway.
“We are ready to fly... Our challenge is setting up the call centre and a website, a lot of which we could not do until our license was approved. As soon as we feel comfortable that those elements are in place, we will announce a launch date,” he explained.
Along with direct sales, a dedicated travel agent booking portal will be built into the carrier’s website. Preferred supplier agreements and compensation for travel agents will also be negotiated.

http://travel.iafrica.com/flights/877878.html

 

[Ockie]

Comair’s courtbid to crash FlySafair

Operators ofComair and the team setting up Skywise —another budget operation —apply to the high court toprevent the new airline from takingoff
FLYSAFAIR, the latest low-cost airline to try to take to local skies, is heading into a legal storm. The operators of Comairandthe team setting up Skywise —another budget operation —have applied to the high court to prevent the new airline from taking off.
The moveis likely to infuriate the travelling public who have been paying increasingly high prices since the demise of the much-loved but fatally flawed 1time a year ago.
Price-busting competition was promised by Fastjet, a UK-based operation earlier in the year, but that was put onice apparently because their local ownership structure involving a politically connected consortium did not pass legislative muster.
Safair, which operated asa freight, charter and aircraft-leasing companyin SouthAfrica for about40 years, announcedlast month it was going to launch FlySafair, a mainstream passenger operation with about60 flights a week between Cape Town and Johannesburg.

Comair CEO ErikVenter andSkywise CEO Rodney James objected to the Air Services Licensing Council giving the company an operating licence.
Mr Venter andMr James argued that the airline, a subsidiary of listed Irish aviation group ASL, did not comply with the ownership structure set down in the Civil Aviation Act, which stipulates that airlines must be 75% owned bySouth Africans.
Instead, ASL got around that requirement by handing25% each to three local executives — ASL’s group CEOHughFlynn, SafairCEO Dave Andrew, and Safairchieffinancialofficer Elmar Conradie.
Mr Venter andMr James pointed out that for one thing, Flynn, although South African, was based in Ireland, which should disqualifyhim.
They argued that if FlySafairwas allowed to operate like that, it would set a precedent that would open the way for the likes of Emirates and Virgin to set up shop here, and takeover the market with little or nolocal benefit.
Mr Venter has been involved in a number of spats in the industry. He was vocal aboutstate-owned low-cost carrier Mango being a major cause in 1time’s failure, and wasquick to take onFastjet’s dubious local ownership structure.
The movecould haveset a precedent for foreign-owned airlines to start operations here.

Within weeks of MrJamesand MrVenter’s objection, the licensing council dismissed it. Mr James saidhe had received an “informal e-mail” telling him the licence was being granted.
While Safairargued they have complied with the local requirement —bygiving the 75% to their three executives —Mr Venter and MrJames believed this was a barely concealed front to allow the airline to get a toehold in the lucrative SouthAfricanmarket.
When asked about this, Mr Conradie told Business Times this was not the case. He said Mr Flynn hadbeen born in South Africa, had a local ID and passport, owned property in Cape Town and had avalid and active South African pilot’s licence.
But, said Mr Jamesand MrVenter, even if the local shareholders were valid, the parent operation, ASL, stated in its financial reports for both 2011 and2012 that it owns 100% ofSafair, which means this body is not recognising any SouthAfricanshareholding.
However, LizDaly from ASL said they owned only 25% of the issued share capital andvoting rights of the SouthAfricansubsidiary FlySafair.
Mr Venter said a further issue was that there were different classes ofshares with different rights — the shares issued to Mr Andrews, Mr Flynn andMr Conradie had limited voting rights, meant they would not receive dividends, and meant they could be bought out at any time by senior shareholders.

Mr Conradie questioned Comair’s motives, suggesting the court action was simply an effort to hold on to their market share. “We will be providing low-cost, high-value flights in direct competition with them,” he said.
Mr Venter

http://www.bdlive.co.za/business/transport/2013/09/15/comairs-court-bid-to-crash-flysafair

 

[OMB]

http://www.bdlive.co.za/business/transport/2013/09/15/comairs-court-bid-to-crash-flysafair

sounds like there's gonna be war