Flysafair / Comair court case

[Mynard]

Comair is definately hurting themselves with this one.

I phoned and sent my FlySafair reservasion to their reaccommodations@comair.co.za address, and have not had so much as a confimation of receipt back.

Looks like they are going to try and make it as difficult as possible for us to get re-accommodated on their planes.

I'll give them the benefit of the doubt for now. But come next week I'm getting on my soap box in the town square. And being an internet citizen, that is one Big <<moderated - language>> square. Hehehe

Just wanted to post a quick update on the ReAccommodation bit that Comair was ordered to do.

I had my flights rebooked and was accommodated within 5 minutes of either side of the original bookings. And it wasn't even difficult, no complaints or excuses.
I must say that I'm pleasantly surprised, well done Kulula for doing the right thing to stranded passengers again.

Although I would still support FlySafair when they finally launch, for now I'm happy with my cheap flights in peak season.

~M~

[FoxTROT]

Some extra info from

http://www.bdlive.co.za/business/transp ... -spotlight

LAST week’s damning judgment in Comair’s successful application for a court interdict against FlySafair raises serious questions about whether the new, low-cost aspirant airline will ever take to the skies — dashing hopes of more competition and cheaper fares in the domestic market.

It had been FlySafair’s intention to begin flying between Johannesburg and Cape Town this week.

At the time of North Gauteng High Court Judge Neil Tuchten’s ruling, about 2,500 people had taken the airline up on return flights priced at about R1,600.

With FlySafair grounded, Comair can — at least for the time being — enjoy having one less competitor to contend with. Comair has agreed to honour all the flights booked with FlySafair.

However, in the interdict proceedings, it was up to Comair and Skywise — another yet-to-be-launched, low-cost carrier in South Africa — to convince the court that their case was not merely about competitors trying to stifle competition in the domestic market.

Judge Tuchten not only agreed that FlySafair, which is owned by Safair, had a case to answer. He also detailed how appallingly the Air Services Licensing Council had dealt with Comair and Skywise’s objections over FlySafair’s licensing process, including after the licence had been awarded.

Judge Tuchten said he thought there was a "strong" chance that FlySafair in its application had "deliberately concealed" information about its shareholders.

The significance of this is that South African law ensures there is a cap on foreign ownership of airlines in the domestic market, which is designed to protect local carriers. Only 25% of an airline company may be owned by foreigners.

In his scathing judgment, the judge said the evidence was "well nigh overwhelming" that FlySafair’s holding company, Safair, had created a scheme to simulate meeting these legal requirements.

FlySafair is the latest in a string of firms wanting to take up the gap created by the bankruptcy of 1time airline.

London-listed fastjet, the low-cost carrier based in Tanzani a, has been talking about its entry into South Africa’s market since 1time’s failure. In July, fastjet finally ended its second attempt to operate domestic routes and will focus on developing the Dar es Salaam-Johannesburg route. It has vowed to return to South Africa.

Comair and Skywise objected to the granting of a licence to FlySafair, and when their objection to the Air Services Licensing Council disappeared into a black hole, they resorted to the courts to prevent FlySafair from starting up.

At issue for FlySafair’s competitors was that they both believed it did not meet the cap on foreign ownership.

Comair CEO Erik Venter has repeatedly said the FlySafair structure was a front — the same thing he said about fastjet’s scheme. Mr Venter also maintained that FlySafair could not be given a licence because it did not meet the legal requirements. Judge Tuchten agreed.

Comair and Skywise argued two central points. First, that Safair would not have "effective control" of FlySafair, and second, that not enough of the FlySafair shareholders were residents of South Africa.

Judge Tuchten said that on the evidence there was a "strong probability" that Safair was "both commercially and legally obliged" to "defer to and implement any decisions" made by the two holding companies, one Irish and the other Belgian, that control Safair. "The evidence shows that both the holding companies control their subsidiaries."

In addition, the shareholder agreement submitted to the licensing council said three FlySafair directors would each hold 25%, and Safair the balance. The three directors were said to be South African residents, a legal requirement.

However, the judge said the law requires that 75% of the "voting rights" have to be under the control of South African residents.

Under the FlySafair shareholder arrangement the shares held by the directors were "a special class of shares called A ordinary shares" that "have restricted rights" and 10 times fewer votes per share than the shares held by Safair.

"On a purely arithmetical analysis, Safair Ireland holds something more than the 25% of the voting," Judge Tuchten said. No "reasonable person" could have concluded that the three directors held 75% of the voting rights. That the directors declined to be cross-examined "reinforced the probabilities that grounds" of objection were good, he said.

"The financial and reputational prejudice which Safair will suffer as a result of an interim interdict has, in my view, as its cause Safair’s scheme, which I think is probably illegal and thus ineffectual," Judge Tuchten said.

[solo]

If Comair are going to be short of seats when it comes to accommodating Fly Safair passengers, they could always do what the other airlines do.

Charter another aircraft in to carry those pax left stranded. 1time and Mango did it and still do it.

There's a company at Jhb that leases aircraft... Think they have 2 X 737-400's ready to help out, although that would be a little bit awkward.

Fly Safair may be down but Safair is still a leasing company...

[FAQ]

The court order did state that Comair would need to charter in aircraft if necessary to accommodate the FlySafair pax.

I don't think it will be necessary as Comair do have enough aircraft at the moment. I read somewhere that there were only about 2500 Pax that had booked only FlySafair, spread over a fairly wide timespan so most pax can be accommodated on existing flights.

[4x4]

COMAIR, the operator of low-cost carrier kulula, said on Thursday it planned to object to a new licence application from potential rival FlySafair.

FlySafair’s ambition to launch on October 17 was snuffed out by an interdict in response to an application brought by Comair and yet-to-be-launched Skywise. FlySafair has since lodged a new licence application with the Air Services Licensing Council after concluding a black economic empowerment (BEE) deal, FlySafair CEO Dave Andrew said.

Comair and Skywise had objected to the licence awarded to FlySafair on the basis that the company did not comply with South African legislation that limited foreign ownership to 25% on a domestic licence.

Comair’s head of regulatory affairs, Kim Gorringe, said on Thursday FlySafair had written to Comair saying it planned to withdraw from the legal review process and to make a new application to the licensing council for a licence.

"They have not formally withdrawn yet," Mr Gorringe said. "We feel the (new) application is premature and feel (that) the current application is defective in certain respects."

FlySafair was also still in possession of the scheduled domestic passenger service (S1) licence granted to it last month and regulations did not allow an airline to hold two S1 licences, Mr Gorringe said.

"They have a licence and the licence is subject to a review application, and there has been no formal withdrawal by Safair or the licensing council of their participation in the review application," he said.

Mr Andrew said he found it "strange" that Comair could claim this as FlySafair had concluded a BEE deal with employees, changed the ownership structure to exclude former shareholders, and chosen a South Africa-registered holding company as another shareholder.
http://www.bdlive.co.za/business/transp ... pplication

Heard they want to be flying by the 7th Dec 13. Hope so

[Cornell Blok]

Wow Comair really scraping the barrel now

Skywise might be enjoying Comairs company now but I'm sure once they ready to fly there will be a few speed humps from Big C

[gear up]

Guys to be fair to Comair, it's really tough out there especially when competing with SAA and the unbelievable airport taxes.

Here is a example: I went online (Kulula) to book flights for myself, the Mrs and 2 kids from Durban to Cape Town return for a week. The total came to R12000, of that only R3800 was for the actual airline and R8200 was airport taxes! Of course I refused to book and pay those taxes so we changed our week away to somewhere local where we can drive to. That is absolute madness from the government, the airline price was totally acceptable until you add taxes, I don't how how the poor airline is supposed to survive under those conditions.

I honestly can't blame them for objecting competition even though it will create more jobs and eventually help me down the line as a aspiring airline pilot but c'mon we have to be realistic, these taxes need serious reviewing first!

[Myle]

Guys to be fair to Comair, it's really tough out there especially when competing with SAA and the unbelievable airport taxes.

Here is a example: I went online (Kulula) to book flights for myself, the Mrs and 2 kids from Durban to Cape Town return for a week. The total came to R12000, of that only R3800 was for the actual airline and R8200 was airport taxes! Of course I refused to book and pay those taxes so we changed our week away to somewhere local where we can drive to. That is absolute madness from the government, the airline price was totally acceptable until you add taxes, I don't how how the poor airline is supposed to survive under those conditions.

I honestly can't blame them for objecting competition even though it will create more jobs and eventually help me down the line as a aspiring airline pilot but c'mon we have to be realistic, these taxes need serious reviewing first!

Gear up

Dont be fooled by those taxes. Believe me it is just a marketing exercise. Of those R8200 only about R1500 is taxes. The rest is part of your ticket disguised as fuel surcharges and levys.

It is just a clever way of fooling the consumer.

[b7x7]

Guys to be fair to Comair, it's really tough out there especially when competing with SAA and the unbelievable airport taxes.

Here is a example: I went online (Kulula) to book flights for myself, the Mrs and 2 kids from Durban to Cape Town return for a week. The total came to R12000, of that only R3800 was for the actual airline and R8200 was airport taxes! Of course I refused to book and pay those taxes so we changed our week away to somewhere local where we can drive to. That is absolute madness from the government, the airline price was totally acceptable until you add taxes, I don't how how the poor airline is supposed to survive under those conditions.

I honestly can't blame them for objecting competition even though it will create more jobs and eventually help me down the line as a aspiring airline pilot but c'mon we have to be realistic, these taxes need serious reviewing first!

Gear up

Dont be fooled by those taxes. Believe me it is just a marketing exercise. Of those R8200 only about R1500 is taxes. The rest is part of your ticket disguised as fuel surcharges and levys.

It is just a clever way of fooling the consumer.

100%

[GL]

FlySafair details new ownership

Cape Town - We now have the details of FlySafair’s recently reported new ownership structure, and they have confirmed that there is only one class of ordinary shares in the new structure, with no differences in the economic benefits or voting rights.

The objections around FlySafair obtaining a South African air services licence pivoted around the requirement to be 75% South African owned.

In particular it was questioned whether Safair chairperson Hugh Flynn was South African enough, and attention was drawn to the different classes of shares (the shares held by the South Africans didn’t have the same rights as the overseas shares).

In his ruling, judge Neil Tuchten said that there was a “strong probability that Safair is both commercially and legally obliged to defer to and implement any decisions made by its holding companies in relation to Safair's proposed operation ... and that Safair will thus not be in effective control of the proposed new enterprise”.

Safair had been working on a BBBEE deal since April 2013.

They held off on the implementation of the deal pending the outcome of the court case with Comair as they were worried that it would have an impact on the court case.

Given that the interim interdict was granted, the BEE deal was then completed as there was no reason not to do it anymore. In fact it was very good reason to buy out Flynn who Comair attacked based on the fact that he currently works in Ireland.

The effect of the deal is that the shareholding now looks as follows:

– 25% Safair Holdings – a 100% subsidiary of the ASL Group of companies (foreign owned). This is the maximum that is allowed to be held by non-South Africans under the Air Services Licensing Act.

– 25.1% - NdizaSafair – an Employee Share Ownership Plan implemented for the purposes of BBBEE. FlySafair believe this is the largest such ownership deal done in the aviation sector.

As part of this, the shares of Flynn, which was the major part of Comair’s objections, were repurchased by Safair Operations, effectively taking out the problem with his shareholding.

The participants of the trust must be permanent employees and have been working at Safair for longer than one year.

As part of this process Dumisani Mthombeni, who was elected as trustee of the Employee Share Ownership Plan, has also been appointed as director of Safair Operations.

– 49.9% Safair Investment Trust – at the same time E Conradie and D Andrew consolidated their shareholding into an investment entity. They brought in another director, FW Davidson as investor.

In other aviation news this week SAA rejected the Free Market Foundation’s allegation that it is obsessed with growth, and seemingly linked the participants to those trying to stop new airlines from joining the industry.

“Those behind it are the same individuals who oppose the new entities from joining the industry and operating for they know the consequences. Sadly, this does not in any way serve the interests of the consumers,” said SAA spokesperson Tlali Tlali.

- Fin24

[henkhugo]

http://www.news24.com/Travel/Flights/SA ... e-20140416

Cape Town - Safair has announced that the Air Services Licensing Council (ASLC) has granted FlySafair a domestic air service licence for the operation of domestic scheduled flights.

The airline released a statement saying that this is in addition to the international and domestic unscheduled licence that it held for almost 50 years, providing aviation services both domestically and locally.

[FoxTROT]

Full press release here:

http://flysafair.co.za/data/FlySafair_announcement.pdf

[Cornell Blok]

Wish I knew this before booking our flight to Capetown

[Flyman]

Nice one SAFAIR.

[GL]

Comair will object again - they dont buy Safair's claimed ownership structure.