Monday, May 6, 2013

► SOUTH AFRICA: FederalAir reiterates that it's tie-up with fastjet is above board following allegations of fronting

Fedair logoSouth Africa's, Federal Air (7V), the airline slated to become fastjet South Africa's new partner, has issued a statement reiterating that it's deal with the United Kingdom-based Tanzanian LCC is fully compliant with South Africa's Air Services Licensing Act, 1993. The move comes after members of South Africa's aviation community expressed doubts as to who was really running the operation and calling the shots.

fastjet A320 in Johannesburg yesterday
fastjet A320 in Johannesburg (Craig Ginanis)
Last week, a memorandum of understanding (MoU) was signed setting up a joint venture (JV) with South African investment firm, Blockbuster, now known as fastjet Holdings, in which fastjet is to hold a minority 25% stake while the rest will remain in the hands of Blockbuster. Flights are planned to operate between Johannesburg and Cape Town twice a day, seven days a week, with a possible launch set for May 31, 2013.

According to Federal Air, all operational control is to be fully retained by FedAir at all times, in compliance width the Air Services Licensing Act, 1990 (Act no 115 of 1990), the International Air Services Act, 1993 (Act no 60 of 1993 and the Civil Aviation Act, 2009 (Act no 13 of 2009). 

Fastjet Holdings bring additional management expertise in the low cost air model, complementing existing skills within Federal Airlines. Furthermore, fastjet Holdings will bring financial and strategic investment to FedAir, developing the fastjet brand in South and Southern Africa.
"We can confirm that both Domestic and International air service licenses (S970D, N933D, I/S135 and I/N200) and operating certificates (Part 121 and Part 135) remain within and managed by Federal Airlines. Federal Airlines will also continue to operate its fleet of twenty turboprop aircraft under the Federal Airlines brand.

Fastjet Holdings and Federal Airlines are working closely together to develop the fastjet brand for all large aircraft, initially operating domestic routes, shortly followed by regional routes. "
Prior to its tie-up with fastjet, FedAir  had catered to the shuttle and charter markets using a fleet of turboprop aircraft serving various safari destinations in and around Southern Africa.
Last week, Comair CEO Erik Venter, who had previously objected to fastjet's proposed acquisition of 1Time(T6), raised questions about whether the airline would be treated as "quasi-state-owned", given Edward Zuma’s (son of President Zuma and the head of Blockbuster aka fastjet Holdings South Africa) involvement.
"We will have to see if this is some sort of fronting exercise by Fastjet to comply with South Africa’s regulations," Mr Venter said.  "Ultimate control will be with Fastjet and this looks like some sort of fronting arrangement to cover the requirements for local control."
Source [BusinessDay]

Durban-based LCC Velvet Sky (VZ), who went under in March last year, was linked to South African president Jacob Zuma through his nephew, Khulubuse Zuma, whose business consultants at the bankrupt Aurora gold mine — Solly Bhana, Fazel Bhana and Thulani Ngubane — were also consulting at the airline when it was liquidated over unpaid fuel bills.