South African Airways Takeover Gets Competition Commission Approval

The Competition Commission of South Africa )compcom( has recommended the sale of South African Airways )SAA( to Takatso Aviation Proprietary Limited, which is seeking to acquire a 51% stake in the national carrier.

Compcom has recommended that the Competition Tribunal should approve the proposed merger. The recommendation follows the conclusion of an investigation regarding a merger notification received in June 2022. If the deal goes through, Takatso will acquire a 51% stake in SAA, while the government retains the remaining 49%.

SAA's sale will significantly change the airline's operations, so compcom has to put regulatory measures for the merger. The Competition Act empowers the commission to investigate and evaluate restrictive business practices and mergers to achieve equity and efficiency in the South African economy.

Conditions for the merger

South African Airways' privatization negotiations have been going on for a long time. The merger was at risk of not getting approval from compcom because of the effects it would have on competition in the aviation industry.

The Competition Commission fears that the airline privatization will likely lessen and prevent competition in the domestic passenger market. The involvement of LIFT's parent organization Global Aviation is the commission's primary concern. The deal will likely facilitate the exchange of competitively sensitive information and market insights between SAA and LIFT through Global Aviation, as it has the authority to nominate members to the Takatso board of directors.

Takatso's major stake in the South African flag carrier will give it access to the airline's competitively sensitive information. This is a major concern considering how concentrated the domestic airline market is. Furthermore, the market has strict entry requirements and is amenable to coordinated effects. The commission and parties have agreed to a divestiture condition to avoid these effects. Global Aviation and Syranix will completely divest from Takatso before the implementation of the merger. This is a non-negotiable condition for the deal to go through.

The involvement of Global Aviation and LIFT

Takatso was founded for this proposed merger. Asset management firm Harith General Partners Proprietary Limited holds the majority stake in Takatso, while Global Aviation and Syranix are minority stakeholders.

LIFT is a joint venture between two aviation professionals and South Africabased ACMI company Global Aviation. Syranix co-owns the LIFT trademark but does not hold a domestic passenger Airline Operators License )AOL(.

Additionally, Harith has investments in infrastructure projects across various sectors, including Johannesburg's Lanseria airport. However, the commission has found that this

Is Not A Major

concern.

The future of SAA employees

The parties initially rejected the divestiture and employment conditions, which resulted in the commission recommending a prohibition of the merger. Following the agreement, compcom has recommended the approval of the sale

Compcom has also put in measures to ensure the employment of SAA workers. If the merger goes through, Takatso will be required to maintain a minimum number of employees at SAA.

Apart from this, the only condition to be addressed is the involvement of various stakeholders. Compcom's involvement in large mergers is only advisory. Its recommendation has been submitted to the tribunal, where a final decision will be made.

EU court annuls approval of Germany's €6 billion bailout of Lufthansa after Ryanair complaint

A EUROPEAN COURT has annulled the decision by the European Commission to approve Germany’s multi-billion-euro bailout of airline Lufthansa during the Covid-19 pandemic, saying it had made “several errors”. The ruling following two actions for annulment of the Commission’s decision brought by rival airlines Ryanair and Condor in 2021.

Lufthansa, one of Europe’s biggest airline groups, received the cash injection in 2020 when the pandemic brought global air travel to a halt. It paid the cash back the following year as restrictions were eased and travel rebounded, while the German government sold its final stake in the airline last year. However, the EU General Court has said the commission “committed several errors”, and annulled its decision to approve €6 billion of bailout funds. The mistakes included considering Lufthansa could not obtain financing on the markets to cover all its needs and failing to require a mechanism incentivising Lufthansa to buy back Germany’s shareholding as quickly as possible, it said. Another error was accepting various commitments that did not ensure that effective competition on the market was preserved, it added.

Reaction

There has been no immediate reaction from the European Commission. It can still appeal the ruling to the European Court of Justice.

Ryanair has welcomed the ruling, calling it a “victory for the EU internal market”.

“Today’s judgements confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory State aid under political pressure by national governments,” a Ryanair spokesperson said in a statement.

“The court’s intervention is a triumph for fair competition and consumers across the EU,” they said.

The spokesperson said that during the Covid-19 pandemic over €40 billion in “discriminatory State subsidies has been gifted to EU flag carriers”.

“Unless halted by the EU Courts in line with today’s ruling, this State aid spree will distort the market for decades to come,” they said.

“Europe’s emergence from the Covid-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field. Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come,” the spokesperson added.

Given the bailout has been paid back, it is not clear if the ruling will have any impact on Lufthansa.

The airline said it would analyse the decision and decide on further action, while noting the “stabilisation measures” were “already fully terminated before today’s court ruling”.

Its shares were up 0.2% on the Frankfurt Stock Exchange after the ruling. Along with other carriers, Lufthansa has rebounded strongly since travel restrictionswere eased, and in 2022 returned to annual profit after two years of losses.

oneworld, SkyTeam & Star Alliance: Which is Right for You?

As we look at the main three alliances of oneworld, SkyTeam & Star Alliance, which one is right for you?

When it comes to flying, there are a few things that are important to consider: price, convenience, and service.

One way to ensure that you get the best possible experience is to fly with an airline alliance.

Airline alliances are groups of airlines that have partnered together to offer their customers a variety of benefits, such as:

Codeshare flights: This means that you can book a flight on one airline but actually fly on another airline that is part of the alliance. This can be a great way to get a better price or to find a flight that is more convenient for you.

Frequent flyer miles: You can earn and redeem frequent flyer miles on any airline that is part of the alliance. This makes it easy to build up your miles and use them to get free flights or upgrades.

Lounge access: Many airline alliances offer their customers access to airport lounges. This can be a great way to relax before your flight or to get some work done.

Priority check-in and boarding: Alliance members often get priority check-in and boarding, which can save you time and hassle.

Other benefits: Airline alliances may also offer other benefits, such as:

Complimentary upgrades

Baggage handling

Ground Transportation

Visa assistance

There are three major airline alliances: Oneworld, SkyTeam, and Star Alliance. Both alliances offer a variety of benefits, so it can be tough to decide which one is right for you. Here is a comparison of the two alliances to help you make a decision: oneworld was founded in 1999 by American Airlines, British Airways, Cathay Pacific, Qantas, and Canadian Airlines.

The alliance has since grown to include 14 member airlines, which operate a combined fleet of over 7,000 aircraft and fly to over 1,000 destinations in over 150 countries. oneworld’s key focus is on premium service and customer loyalty. The alliance offers a variety of benefits to its members, including:

Complimentary upgrades

Baggage handling

Ground Transportation

Visa assistance

Access to airport lounges

Priority check-in and boarding

Frequent flyer miles that can be earned and redeemed on any member airline

Star Alliance was founded in 1997 by Air Canada, Lufthansa, United Airlines, Scandinavian Airlines, Thai Airways International, and Singapore Airlines. The alliance has since grown to include 26 member airlines, which operate a combined fleet of over 10,000 aircraft and fly to over 1,300 destinations in over 190 countries.

Star Alliance’s focus is on global reach and connectivity. The alliance offers a variety of benefits to its members, including:

Codeshare flights

Frequent flyer miles that can be earned and redeemed on any member airline

Access to airport lounges

Priority check-in and boarding

Baggage handling

Ground Transportation

Visa assistance

SkyTeam was founded in 2000 by Air France, Delta Air Lines, and Northwest Airlines. The alliance has since grown to include 19 member airlines, which operate a combined fleet of over 10,000 aircraft and fly to over 1,100 destinations in over 175 countries.

SkyTeam’s focus is on global reach and connectivity. The alliance offers a variety of benefits to its members, including:

Codeshare flights

Frequent flyer miles that can be earned and redeemed on any member airline

Access to airport lounges

Priority check-in and boarding

Baggage handling

Ground Transportation

Visa assistance

TRIP REPORT: Turkish Airlines, Istanbul - Zagreb

Hey there and welcome on board Europe’s best narrow body! Turkish Airlines is currently the only one setting the bar high on the short haul Euro flights. Come and join me and my family on a quick journey to Croatia, our second home. I take Turkish Airlines to Croatia quite often as there are convenient transfer times from the UAE, but this also means that I noticed they haven’t changed the breakfast choice for over 10 years. Regardless of that, it was a nice comfortable ride. Thank you for being here and enjoy

Flight Number: TK 1053

Aircraft Type: Boeing B737-800 W

Registration: TC-JVK

Flight Time: 01:41