Who's the boss of FlySafair?

Airline 'creating' sanctions after two top dogs sell shares, changing face of trust.

- Hein Kaiser

FlySafair, South Africa's dominant budget airline and subsidiary of Irish company ASL, may have been the architects of its own noncompliance to local ownership and control laws.

The airline was already sanctioned by the Domestic Licensing Council after it found that the airline was 74.86% controlled by its foreign parent. The company was given 12 months to sort it out.

It was also found noncompliant in terms of ownership laws by the International Air Services Licensing Council (IASCL), which is yet to rule on the matter. Mauritius, Zimbabwean, Zanzibar and other international flights are also at risk of suspension or cancellation by the council.

An investigation by The Citizen has shown FlySafair may be directly and indirectly controlled, potentially 100%, by Irish-based parent company ASL using clever legal manoeuvring to skirt the rules.

Based on a transcript of an IASLC hearing on 16 May last year, the primary cause of the airline's noncompliance is a transaction involving the Safair Investment Trust. This entity originally held shares of 25% for the benefit of FlySafair's South African employees and management. It also ensured legal compliance vis-à-vis ownership and control laws.

That changed when two trust beneficiaries, chief executive Elmar Conradie and chief financial officer Pieter Richards, sold their interests in the trust to the Irish entity. This effectively altered the airline's compliance status, while netting an alleged payout north of R90 million between them.