VENTURES AFRICA – Comair has objected to low-cost carrier Fastjet’s bid to buy airline under provisional liquidation 1time, claiming that the bid is an effort to obtain international route rights without following the application procedures.
Comair claims that to allow the purchase of the failed airline together with its existing licences would have detrimental effects to the air travel industry at large by enabling foreign-owned companies to get around local-ownership regulations.
Presenting Comair’s objections to the 1time acquisition by Fastjet to the International Air Services Council, Erik Venter, Chief Executive Officer of Comair contends that to grant the transfer of licences from 1time to Fastjet would “weaken the position and protection of South African shareholders in African aviation, which is the rationale for the 25 percent foreign shareholding limit as per the Air Services Licensing Act,” Business Day reports.
While the Air Services Licensing Act – which was implemented in 1990 with a view to protecting local players in the air traffic industry – places limits on the level of foreign shareholding any licence holding company may have, this limit may be waived by the Transport Minister.
However, the minister will be placed in a difficult position, as Andries Ntjane, Permanent Secretary at the International Air Services Council revealed that to date, no one has applied for the exercise of this discretionary exemption.
Launched recently in Tanzania, UK-owned low-cost airline Fastjet hopes to acquire the failed airline -which has been placed under provisional liquidation, with the final declaration stayed while the acquisition negotiations take place – for a nominal fee in efforts to achieve rapid pan-African expansion by launching a succession of hubs across the continent.
While Fastjet has yet to comment on Comair’s attack, Comair insists that the bid to acquire 1time is not proper, with Venter saying: “instead of following the normal process of applying for route rights from Tanzania, they are bypassing the whole bilateral route application process by buying 1time and acquiring the route rights as a South African airline.”
South Africa’s national airline, South African Airways, and low-cost airline Mango, have also submitted objections to the proposed acquisition.
Photo via: South Africa Travel Online