CemAir Challenges Harith Acquisition of Safair Before Competition Tribunal

• CemAir has requested the Competition Tribunal to prohibit Harith Aviation's acquisition of Safair Holdings.
• The proposed transaction raises concerns about concentration of economic interests in the aviation sector.
• The tribunal is considering alternative conditions that preserve commercial and operational independence.
• The outcome of this case will have significant implications for airport governance and access to infrastructure.

The proposed acquisition of Safair Holdings by Harith Aviation has sparked concerns about the potential impact on competition in the South African aviation market. At the heart of the matter is the relationship between FlySafair, a domestic airline, and Lanseria International Airport, where it operates. The Competition Commission had previously recommended that the tribunal approve the transaction with conditions related to information sharing and ensuring fair terms for airlines using airport services at Lanseria. However, CemAir has requested the tribunal to prohibit the acquisition, citing concerns about the concentration of economic interests in the aviation sector.

The proposed transaction raises questions about airport governance and access to infrastructure. Harith Aviation's interest in Lanseria International Airport creates a direct vertical link between FlySafair and the airport, potentially allowing for coordination of airline and airport strategy. This overlap of economic interests could soften or distort competition between airports, particularly if Harith InfraCo's simultaneous interest in Lanseria and joint control of Harith Aviation are not properly addressed. The Competition Act requires investigation into any factor relevant to competition in affected markets, including ownership relationships and governance structures.

The outcome of this case has significant implications for the South African aviation market, particularly with regards to airport governance and access to infrastructure. If approved without adequate safeguards, the acquisition could lead to a concentration of economic interests that may harm competition between airlines and airports. Lawyers and compliance officers should pay close attention to this case as it sets a precedent for how competition law is applied in the aviation sector. The tribunal's decision will also have implications for airport governance and access to infrastructure, making it essential to consider alternative conditions that preserve commercial and operational independence.

Lawyers and compliance officers should watch for the potential impact on competition in the South African aviation market, particularly with regards to airport governance and access to infrastructure.

Source: Original reporting via Moneyweb