Popular airline FlySafair has clapped back at reports that it has foreign owners, which is illegal according to South African law, and instead says that there “has been no specific finding that FlySafair is foreign owned.”

This is despite reports on claims from South Africa’s Air Services Licensing Council, which, together with the International Air Services Council, say that FlySafair is predominantly owned by “foreigners” making it non-compliant under the country’s conditions to have a license to operate flights.

In an email conversation with FlySafair’s chief marketing officer Kirby Gordon, Hypertext was told that the problem does not relate to foreign ownership at all. Instead, “the matter at hand is actually about voting rights,” he told us.

“It’s accurate that both [the Air Services Licensing and International Air Services Councils] have declared us non-compliant with the nationality provisions of their acts. However, the international council is yet to share their reasoning so we cannot assume that they have made this decision based on a view that we are foreign owned.”

Gordon insists that FlySafair is not owned by foreigners or by a foreign company, and instead says that compliance issues boils down to who and what actually owns the airline.

“The domestic council have shared their reasoning. Interestingly their reasoning for a non-compliance decision is not about foreign involvement at all,” he said.

“They are arguing that we are not compliant because the airline is owned by a combination of trusts and companies rather than warm-blooded individual people. This is a different issue which has a massive implication because most airlines are owned by companies and trusts rather than individuals.”

Who owns FlySafair?

FlySafair is listed as part of the ALS Aviations Holdings group of companies, an internationally operating holdings firm that is headquartered in Dublin, Ireland.

In its website, ALS says it retained “a minority shareholding in the South African company” namely the Safair Group, which launched FlySafair in 2013. The question then becomes “Who owns the majority of the Safair Group?

FlySafair is both privately owned and unlisted so information about ownership doesn’t have to be completely disclosed to the public, however information about its ownership has been available since late last year due to information leaks.

A report from CH-Aviation details that FlySafair was forced to disclose its ownership structure as part of an investigation launched by the International Air Services Licensing Council last year. According to this information, the airline is indeed majority owned, through a Russian nesting doll situation, by Ireland’s ASL Aviations.

According to an ownership structure allegedly provided by FlySafair itself during the council’s investigations:

Safair Operations Limited (FlySafair) is nearly 50 percent owned by the trustees of the Safair Investment Fund, which are a beneficiary of SAFOPS Investment Holdings. This holdings firm is then 100 percent owned by African Investments DAC – which itself is 100 percent owned by – you guessed it – ASL Aviation Holdings.

Now to the other half. The first 25 percent is owned by Safair Holdings, which is 100 percent owned by Safair Aviation Ireland DAC, which is then also wholly owned by ASL Aviation Holdings.

If this information is correct, this means that at the end of the day, just about 75 percent of FlySafair is owned by ASL Aviation Holdings. Which is what the two aviation licensing councils are claiming.

The other 25 percent of Safair is owned by B4i Safair, a South African employee ownership vehicle as per the information.

It’s not looking good for South Africa’s biggest domestic carrier

Gordon told us that “it’s a complex situation,” and that “there’s no specific claim yet is that they find us non-compliant because we are ‘foreign owned.’ The only reason we’ve had is that it’s because we are owned by a trust rather than actual people.”

We believe he is referring to the trustees of the Safair Investment Fund, which are allegedly funded by a holdings firm also owned by ASL Aviation.

Unless FlySafair can clear the situation up with the two local councils, it will likely lose its license to operate in South Africa, a potential outcome being considered as a devastating blow to the local tourism and airline industry as the operator corners more than 60 percent of the domestic market.

We believe FlySafair may have to find a loophole like the one being ironed out by Starlink and the Department of Digital Technologies, where a further investment by the internationally operating holding firm would have to be made in order to retain compliance and licensing.