Harith move positions FlySafair for continental growth as ownership scrutiny continues

Low-cost carrier FlySafair’s acquisition by pan-African infrastructure investor Harith General Partners has placed the airline on the cusp of expanded growth opportunities across the continent, particularly through the African Continental Free Trade Area (AfCFTA) and deeper commercial links with Europe, analysts said on Tuesday.

The transaction comes as FlySafair seeks further regulatory clearance from aviation authorities over its foreign ownership structure, ahead of a 29 March deadline set by licensing councils. 

The airline, about 75% owned by Irish Aviation group ASL Holdings, has insisted the motivation for the transaction was not initiated in response to the findings by the Air Services Licensing Council.

Instead, it said the deal will not have any bearing on the outcomes and matters under consideration by the licensing authorities who will continue to assess the proposed structure in accordance with their statutory mandates.

Transport economist Dr Joachim Vermoteen said the deal was a positive signal for the development of aviation on the continent, particularly as African states deepen cooperation through bilateral agreements and regional frameworks.

"There are more developments happening and bilateral agreements being made between states. Africa is developing and there are growing business opportunities with Europe. This is a good time to invest in one of the best airlines on the continent," Vermoteen said.

Aviation analyst Phuthego Mojapele said the transaction could prove a sound investment, but cautioned that it would be important for Harith’s shareholders, including the Public Investment Corporation (PIC), to be assured that thorough due diligence had been conducted.

"Flysafair had no choice because they have been found in contravention of the foreign ownership structure by both councils. They are within that 12 month period to account or they probably would have had their licences revoked. they had to bed the transaction with Harith," Mojapele noted.

He added that, as the deal remains subject to scrutiny under competition and aviation regulations, regulators should also interrogate Harith’s own shareholding structure to ensure full compliance.

"What the public who are investors in the PIC in pension investment should worry about is whether the investment has passed all the tests that will benefit shareholders," Mojapele said.

"In aviation it is said that you spend like a billionaire to make millions. The PIC has to furnish investors with  that confidence."

The Competition Commission, through which the transaction has reportedly been referred to by the parties, said it was yet to receive the application.

"The Competition Commission has not been notified of the merger in question," said spokesperson Siyabulela Makunga.

The deal, announced on Tuesday, is for an undisclosed amount, with details on whether it is a cash or share transaction being withheld pending the necessary approvals, both parties said.

Harith is a pan-African infrastructure investor with more than $3 billion in assets under management and has an over 20-year record of mobilising for infrastructure developments on the continent.

FlySafair has grown to be a market-leading low-cost carrier since its establishment in 2014. It holds 67% of all domestic seat capacity with a fleet of 39 B737 aircraft. The airline has carried more than 54 million passengers at reduced fares on common routes.

Harith co-founder and chairperson Tshepo Mahloele said FlySafair represents exactly the kind of African success story the group seeks to back: a well-run, resilient business delivering real economic value every day.

“Our ambitions in this sector remain unchanged. We are excited to support the next phase of this journey and to support a company that South Africans can be genuinely proud of,” Mahloele said.

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