The Department of Public Enterprises (DPE) has welcomed the Competition Tribunal’s approval of the Takatso Consortium’s proposed purchase of a 51% share in South African Airways (SAA).
The approval paves the way for the consortium to get involved in the operations of SAA and inject the much-needed capital into the struggling national air carrier.
In a statement released last night, the department has hailed the decision as a significant step in the government’s efforts to ensure the re-emergence of SAA as a key strategic asset.
The Competition Tribunal approved the transaction with conditions, including that the airline does not retrench staff:
Another condition is that the minority shareholders in Takatso, Global Aviation and Syranix which co-owns LIFT airline, which is a direct competitor of SAA, divest from the company.
Competition Commission spokesperson, Siyabulela Makunga says, “The Commission has noted the Competition Tribunal’s decision to approve the South African Airways and Takatso merger subject to the implementation of the conditions that the Commission proposed to the Tribunal. We are also satisfied that the divestiture of the minority stakes in Takatso will certainly be addressed the Competition Commission concerns that were raised when we assessed this merger and we hope that this will be to the greater benefit of the South African consumer. We also satisfied that through this decision all the South African Airways employees will be protected from retrenchments as a result of the merger.”
Takatso Aviation says its deal to acquire a controlling share in the national carrier will bring much-needed competition in the local airline industry.
Takatso says more airlines in the industry will increase competition and help reduce the high cost of flying.
The consortium believes its partnership with SAA will help the airline grow.
Takatso Aviation spokesperson Thulasizwe Simelane says, “The Competition Tribunal approval of the transaction reaffirms our belief that the airline industry in this country can do with more seat capacity and related price and service competition especially in light of the current mismatch between demand and supply that has been created by the significantly reduced scale of SAA operations in recent years as well as the demise and discontinuation of operations of several other airlines.”
The Department of Public Enterprises said the R3 billion injection by Takatso would help SAA in the expansion of its routes and its fleet.
The Tribunal says it will provide details of its reasons for the decision in due course.