The Department of Transport has confirmed that the Domestic Air Services Council has directed privately owned low-cost airline Safair to comply with the requirements of the Air Services Licensing Act within 12 months of January 23, effectively giving the airline an opportunity to remain in the skies while fixing its compliance matters.

The sanction was handed down at a Domestic Air Services Council meeting held on January 23, following the council's decision taken on December 19 last year that Safair had failed to meet the requirement that 75% of voting rights must be held by South African citizens who are also residents of the country.

Critically, the council took a stricter stance in deciding that the 75% ownership requirement must be met by natural persons, not juristic persons, which renders Safair – and potentially other airlines – non-compliant.

Safair’s FlySafair structure includes a 50% trust managed by South African trustees. In the past, it was understood that this met the legal ownership requirements. However, the stricter stance now insists that these rights must be held by natural persons rather than corporate or trust structures.

This essentially means that Safair will have to rework its ownership structure, which will set a precedent for other airlines who might also need to restructure their holdings or face similar consequences.

In its letter to Safair, the council said that, should the airline fail to comply before the 12-month deadline, it will be required to appear before the council to justify why its licence should not be suspended or revoked.

The council also directed Safair to submit a term-sheet detailing its milestones and compliance plan within 14 days. The airline is also obliged to provide monthly updates to the Council throughout the 12-month period regarding the implementation progress of its compliance plan.

Safair can still appeal the council’s sanction at the High Court – an option that the airline has not yet ruled out.