CemAir Challenges Proposed FlySafair Sale, Raises Competition Concerns
South African airline CemAir has formally challenged the proposed sale of FlySafair to Harith Aviation, asking the Competition Tribunal to block the transaction over concerns about competition and overlapping ownership interests.
The proposed acquisition has been progressing for several months. Harith confirmed earlier this year that it was in discussions with FlySafair’s Irish parent company, ASL Aviation Holdings, regarding the purchase.
During proceedings, CemAir’s representative, advocate Dwight Snyman, raised concerns about the potential flow of commercially sensitive information resulting from Harith’s existing interests in the aviation sector.
A key issue is Harith’s 37.5% stake in Lanseria International Airport, where FlySafair is headquartered and operates a significant portion of its network. The remaining interest in the airport is controlled by the Government Employees Pension Fund through the state-owned Public Investment Corporation (PIC).
Snyman pointed out that the PIC also owns a 30% interest in Harith General Partners, creating what CemAir believes could be overlapping interests between the airline, airport and investment structures.
According to CemAir, these relationships could potentially allow sensitive commercial information to move between entities and give FlySafair an unfair competitive advantage at Lanseria.
CemAir also raised concerns about the wider relationship between Lanseria and airports operated by Airports Company South Africa (ACSA), in which the PIC holds a 20% stake. The airline argued that the proposed transaction could potentially reduce competition between the two airport groups.
Why Is FlySafair Being Sold?
The proposed sale follows regulatory scrutiny surrounding FlySafair’s ownership structure.
South African regulations require domestic airlines to have at least 75% South African ownership. Authorities previously determined that ASL Aviation Holdings effectively controlled approximately 74.86% of FlySafair through a trust arrangement.
The ownership issue ultimately contributed to the decision to pursue a sale to Harith Aviation.
The Competition Commission approved the transaction last month, subject to a number of conditions designed to address competition concerns.
Among the conditions are safeguards governing the exchange of commercially sensitive information and requirements that goods and services provided to other airlines at Lanseria must be offered on fair and non-discriminatory terms.
The Competition Commission has also told CemAir that the agreed conditions provide sufficient protection and that the PIC’s indirect interest in FlySafair would remain minimal.
For now, however, the deal remains unresolved.
Following the latest hearings, the Competition Tribunal reserved its decision and is expected to announce its ruling at a later date.
The outcome could have significant implications for South Africa’s airline industry, particularly for competition at Lanseria and the relationship between airlines, airports and major investment groups.
