Competition Commission backs sale of South African Airways, with conditions

South African Airways’ privatisation process faces a new hurdle: competition watchdog has approved the sale of a majority stake to the Takatso Consortium, but set new conditions that include the withdrawal of some of its members, according to a Zawya report.

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Comprising Harith General Partners and aviation companies Syranix and Global Aviation, the consortium had been formed in 2021. That year, the intention to privatise part of the state-owned carrier was announced.

See also: South African Airways plans new strategy for its international operations

Consortium may take majority stake in South African Airways, but with strings attached

The airlines has faced major financial difficulties in recent years, posting losses for more than a decade and surviving only thanks to state guarantees.

A recovery plan was implemented in 2019, but the pandemic soon dealt a further blow and led to an almost total suspension of activities. However, the company gradually began to recover in recent months. Now, the South African state would retain 49% of the company, while the Takatso Consortium would hold the majority stake.

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However, the Competition Commission set a number of conditions, including that the takeover can only go ahead if both Syranix and Global Aviation leave the consortium.

The agency says that otherwise there would be a «substantial lessening and prevention of competition in the domestic passenger airlines market». This is because both are co-owners of the airline Lift, and the transaction could lead to the exchange of competitively sensitive information between that company and South African Airways.

It also demanded a moratorium on redundancies following the acquisition of the majority stake by the consortium. The South African Competition Tribunal will have to approve the final agreement.

See also: South African Airways was sold for $3, and it seems pretty expensive