Good news for flight prices

FlySafair has been given 12 months to resolve its foreign shareholding, meaning South Africa’s largest domestic airline can continue to deliver its services without disruption.

This follows a decision made by the Air Services Licencing Council after it was brought to the body’s attention that FlySafair’s ownership structure was not compliant with South Africa’s regulations for domestic airlines.

These regulations limit foreign shareholdings in a registered airline to 25%.

However, Ireland-based ASL Aviation owns nearly 75% of FlySafair’s shares through its subsidiaries or directly.

This led to submissions from competitors like Airlink and Global Airways, which launched Lift, a competitor to FlySafair, in late 2020.

The airline was threatened with sanctions by the International Air Services Council in late 2024, which included a suspension or cancellation of its licence.

However, FlySafair filed an urgent interdict against the ruling that found its ownership structure non-compliant.

FlySafair is South Africa’s largest domestic airline, meaning its suspension would have dire consequences on the cost of domestic airline fees in South Africa, which has already been highlighted as a significant concern by Parliament.

In 2024, Mzwandile Masina, chairperson of Parliament’s Portfolio Committee on Trade, Industry, and Competition, called on the Competition Commission to conduct a market inquiry into the cost of domestic air travel.

However, FlySafair is aware of the potential impact if its absence from the market and has said it is exploring all available options, “including possible adjustments to its ownership structure or legal action to challenge the ruling.”

“For now, the issue remains a regulatory dispute rather than an operational concern,” it said.

The airline’s CMO, Kirby Gordon, said that “customers can continue booking and flying with confidence, knowing that FlySafair remains fully operational while we address this matter.”

It is also not the first time concerns have been raised regarding the airline’s ownership structure. Comair pointed out in 2014, when FlySafair launched that it was not majority South African-owned and should not be allowed to operate.

Aviation expert Phutego Mojapele said the evidence presented by Comair and now Global Aviation was extensive regarding FlySafair’s non-compliance with regulations, but the problem seemingly has not been dealt with.

Overbooking to keep fairs low

After a FlySafair customer who missed a flight due to overbooking took to social media to share the experience, the airline said this ensures fares stay low.

“If we didn’t do it as an industry, it would ultimately impact upon fares, and you’d probably find that the leniency in terms of those rules around missing a flight would be dropped,” Gordon recently explained.

“In our instance, if you genuinely miss a flight and you arrive at the airport because you were stuck in traffic or whatever the case may be, even though that seat departed without you, we have the opportunity to put another person on that flight.”

Gordon said that because of how the system works, they can afford customers some leniency by trying to get them on the next available flight at a discount.

In the case of getting bumped from a flight due to overbooking, Gordon said that passengers are immediately paid R1,000 cash for the inconvenience before being rebooked on the next available flight.

Aviation analyst Guy Leitch has said that overbooking is common in the aviation industry and added that the Consumer Protection Act has specific provisions for the practice.

“Overbooking is, in fact, not just Flysafair’s problem; it’s a worldwide problem. On a typical flight let’s say there are 183 seats, inevitably two or three people aren’t going to make it,” said Leitch.

“So, during peak times, it makes sense, financially and practically, for airlines to sell 185, maybe 186 seats, out of the 183 available.”

However, he noted that some passengers might face hefty financial consequences if such an incident prevents them from catching a connecting flight. In that scenario, they could have a case against the airline.

CemAir CEO Miles van der Molen disagrees with Leitch about the CPA and FlySafair’s claim that all South African airlines overbook to the extent they do.

“Our reading of the Consumer Protection Act is that overbooking is illegal in South Africa, and we certainly don’t do it.”

“My understanding of FlySafair’s model is that it’s 100% no-show, so they are effectively selling the seat twice. This means that if you don’t arrive for your flight, there is no refund available,” he said.

“They retain that revenue from customers not arriving and then oversell the flight.”