Rival airline asks tribunal to block South African tycoon Tshepo Mahloele's FlySafair takeover

A rival airline has asked South Africa's Competition Tribunal to prohibit Tshepo Mahloele's Harith Aviation's purchase of FlySafair, the country's largest domestic carrier, arguing that the state pension fund sits on both sides of the transaction and would leave competitors unable to match the terms available to the merged group.

Advocate Dwight Snyman, appearing for privately owned CemAir at a tribunal hearing in Johannesburg on Monday, said the deal would place FlySafair into an unusually dense network of overlapping economic and governance interests. He asked the tribunal to prohibit the transaction, or alternatively to find that the identified harm is capable of effective remediation.

The overlap runs through Lanseria International Airport, the only privately owned international airport in South Africa and FlySafair's second base. Harith InfraCo holds roughly 37.5 percent of Lanseria. The Government Employees Pension Fund, represented by the state-owned Public Investment Corporation, holds about 62.5 percent.

Harith InfraCo is one of two entities that will jointly control Harith Aviation once the transaction is implemented, alongside the Pan-African Infrastructure Development Fund 2 SA. The pension fund is itself an investor in Harith InfraCo, and the PIC holds a 30 percent shareholding in Harith General Partners, the fund manager behind the acquisition vehicle.

The state's reach extends to the rest of the airport network. The government holds 74.6 percent of Airports Company South Africa, which owns and operates the country's principal airports and supplies infrastructure and services to South African Airways, FlySafair, CemAir and other domestic carriers. The PIC owns a further 20 percent of ACSA. The minister of transport represents the government's shareholder interest in both SAA and ACSA.

CemAir told the tribunal that any approval should carry structural conditions preserving the commercial and operational independence of FlySafair from Lanseria and related aviation infrastructure interests. Snyman said purely behavioural undertakings should not be accepted unless they are objectively measurable, independently monitored, rapidly enforceable and capable of addressing non-price discrimination as well as formal refusals of access.

The Competition Commission recommended conditional approval on 13 July, subject to restrictions on the exchange of commercially sensitive information and commitments that services and access at Lanseria will be offered to all carriers on fair, reasonable and non-discriminatory terms. Responding to CemAir at the hearing, the commission said Harith had agreed to those conditions and that the PIC would hold only a minimal indirect interest in FlySafair after the merger. The commission's role is advisory. The tribunal makes the final decision.

Harith Aviation is buying Safair Holdings, the parent of Safair Operations, from Dublin-based ASL Aviation Holdings, which is owned by the London private equity firm Star Capital Partners. The transaction was announced in February. No consideration has been disclosed by either party.

The sale followed a regulatory finding that FlySafair breached South African ownership rules. The Air Services Licensing Council determined that trusts and companies rather than individuals held 75 percent of the airline's voting rights, and that ASL effectively controlled 74.86 percent through a trust arrangement. Domestic carriers must be at least 75 percent South African owned. FlySafair was ordered to restructure following complaints from rival carriers, obtained a court suspension of the deadline in October 2025, and continues to operate normally while the licensing process runs.

FlySafair began flying in 2014 with three aircraft and now operates a fleet of about 37 Boeing 737s across ten domestic and five regional routes. It carries more than 60 percent of South Africa's domestic seat capacity and accounted for 32.3 percent of all capacity to and from the country as of July, a concentration that grew as South African Airways shrank.

Harith was founded in 2006 and manages an infrastructure portfolio of roughly $3 billion across transport, energy, telecommunications, healthcare and water. It is based in Sandton. The firm pursued South African Airways before FlySafair, mutually terminating that interest in March 2024, a point the commission relied on in finding that the current deal removes no competitor from the market and substitutes a South African shareholder for an Irish one.

Mahloele has said South Africa is FlySafair's stronghold and plays an important role in its strategy, and that the airline's business model can compete successfully at the regional level.

The South African Cabin Crew Association, which represents most FlySafair cabin crew, told the tribunal it was not consulted as a stakeholder but does not oppose the merger provided it produces no retrenchments. It asked for guarantees on cabin crew jobs and greater transparency on protections for temporary staff. Safair Operations chief financial officer Pieter Richards addressed the hearing on employment terms.

The tribunal has not indicated when it will rule.