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.
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.
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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.
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.
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