Comair confident on licence

Low-cost airline operator Comair is confident it will retain its operating licence.

Johannesburg - Low-cost airline operator Comair confident it would retain its operating licence as the Air Service Licencing Council had indicated it would not oppose the interim order granted against it by the North Gauteng High Court last week, it said yesterday.

The operator’s application for interdict against the council is down for hearing today.

Read: Comair launches urgent application

Yesterday, the listed airline company said it was confident it was compliant with the Air Services Licensing Act.

Comair chief executive Erik Venter accused the council of waging a vendetta against it.

Venter said the company had resorted to the “extraordinary and urgent measures” in order to ensure secure operational certainty for travellers “being held to ransom over the potential disruption to their important travel plans”.

He said a court would afford Comair a fair opportunity to make representation on its insistence it had complied with the act.

The dispute followed a complaint lodged by low-cost airline FlySafair with the council raising questions about Comair’s level of foreign ownership. The Air Services Licensing Act limits the foreign shareholding and voting right in domestic airlines to 25 percent.

In its complaint, FlySafair alleged that Comair had breached the Air Services Licensing Act by failing to apply for a licence amendment after undertaking a share repurchase programme, and secondly that when a “look-through” construction is applied to Comair’s current foreign shareholding component, the amount of this shareholding slightly exceeded the restrictions specified in the act.

Comair’s shareholders include Bidvest subsidiary, BB Investment Company (26.9 percent), Allan Gray (12.9 percent) and Britair Holdings (11.50 percent).

Foreign ownership

Ironically, in 2013 Comair questioned FlySafair’s compliance with the 25 percent requirement when FlySafair applied for a licence. At the time, Comair and domestic low-cost airline, Skywise, successfully petitioned the North Gauteng High Court to revoke FlySafair’s licence on the grounds of excess foreign ownership.

After a change in its shareholding, FlySafair reapplied for a licence and commenced operations in October 2014.

Comair, which operates scheduled services on domestic routes as a British Airways franchisee and also as a low-cost carrier under the kulula.com brand, said it would take its dispute regarding the company’s alleged non-compliance with foreign shareholding requirements of the act on review.

Comair yesterday said today’s hearing would go ahead on an unopposed basis as the council had indicated that it would not oppose it.

The chief executive of the Airlines Association of Southern Africa, Chris Zweigenthal, yesterday said the 25 percent requirement was well-entrenched and understood in the industry.

Zweigenthal said the issue on the case was interpretation.

“We hope the parties can reach an agreement soon,” said Zweigenthal. “It is an important matter that should be resolved quickly. My interest is to ensure that the South African aviation industry operates in a trouble-free environment.”

Comair’s share price on the JSE was up 0.94 percent at R3.23 a share.

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