South African Regulators Clear Harith’s FlySafair Deal Subject to Competition Conditions

The Competition Commission said it would support Harith Aviation’s proposed acquisition of Safair Holdings, the parent company of FlySafair, while imposing measures intended to prevent anti-competitive conduct linked to Harith’s existing interests in airport infrastructure. The transaction still requires final approval from the Competition Tribunal before it can be completed.

According to Bloomberg, reporting by Loni Prinsloo and Jennifer Zabasajja, Harith agreed earlier this year to purchase FlySafair as part of a strategy to expand its transport investments across Africa. The private equity and infrastructure investor manages approximately $3 billion in assets and has identified aviation as a key component of its broader transport portfolio.

The merger has drawn particular regulatory attention because Harith also holds a stake in Lanseria International Airport, located northwest of Johannesburg. Competition authorities concluded that the cross-ownership arrangement could create incentives for preferential treatment of FlySafair relative to competing airlines.

To address those concerns, the parties agreed to behavioral remedies, including restrictions on the sharing of commercially sensitive information and commitments that airport services and access at Lanseria will be provided to all carriers on fair, reasonable and non-discriminatory terms. The Competition Commission said these measures are intended to ensure that rival airlines are not disadvantaged by the transaction.

The proposed acquisition also comes against the backdrop of ongoing scrutiny of FlySafair’s ownership structure.

FlySafair, South Africa’s largest domestic airline by seat capacity, controls more than 60% of the country’s domestic market, according to Bloomberg. The carrier has faced regulatory pressure following findings by South African aviation authorities that its ownership arrangements may not comply with local rules governing domestic airline ownership.

The Domestic Air Services Council previously found that trusts and corporate entities, rather than natural persons, controlled a substantial portion of the airline’s voting rights, raising questions about compliance with requirements that domestic airlines be majority owned and controlled by South African interests. The matter emerged after a complaint lodged by rival carrier Lift.

In a statement issued when the deal was announced in February, FlySafair said the transaction had been under discussion for an extended period and was not initiated in response to the ownership dispute. The airline added that the investment would support its long-term growth plans while maintaining its existing management and business strategy.

Harith Chairman Tshepo Mahloele previously said the acquisition would represent roughly 15% of the firm’s overall investment portfolio and aligns with its objective of developing an integrated African transport network. Bloomberg reported that Harith had previously explored investments in South African Airways and Comair before turning its attention to FlySafair.

Competition issues in airline mergers and cross-ownership structures have increasingly become a focus for regulators globally, particularly where airport assets and airlines share common ownership interests. Authorities typically examine whether such arrangements could foreclose market access or alter competitive conditions for rival carriers.

For South Africa’s aviation sector, the transaction could reshape ownership dynamics in a market that has undergone significant consolidation in recent years following the collapse of several carriers and the restructuring of others.

The Competition Tribunal will now review the Commission’s recommendation and determine whether to grant final approval for the transaction and the conditions attached to it. Regulatory processes involving aviation licensing authorities and ownership compliance issues are also continuing separately from the competition review.

Source: Bloomberg