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FlyNamibia-Airlink deal under spotlight

The Namibian Competition Commission (NaCC) says it neither approved nor was it consulted regarding Airlink’s acquisition of a 40% shareholding in FlyNamibia. 

South Africa’s Airlink last week inked a major deal to acquire a 40% strategic equity holding in privately owned Windhoek-based FlyNamibia, in a move seen by experts as crucial in accelerating Namibia’s post-pandemic recovery and drive the expansion of efficient scheduled airline services to, from and within Namibia. 

“We have not received any notification of the noted acquisition from the parties, for approval,” NaCC Spokesperson Dina //Gowases told The Brief. 

She, however, was quick to point out that it is not always compulsory for merging parties to have approvals before concluding the deal. 

“It depends on whether the transaction met the merger thresholds. Only those that met the merger thresholds, i.e. change in control and N$15 000 000 turnover/assets for target undertaking and N$30 000 000 combined turnover/assets,” she said. 

The Airlink investment, worth an undisclosed monetary sum, is underpinned by a commercial franchise agreement under which FlyNamibia will adopt Airlink’s “4Z” International Air Transport Association (IATA) designator for its ticket sales and scheduled flights, while retaining its unique corporate identity, brand and aircraft livery. 

//Gowases noted should the parties be found to have transgressed by concluding the transaction without the Commission’s approval, they “can be fined up to 10% of turnover for contravening the Competition Act”. 

FlyNamibia, however, maintains the Airlink deal did not fall within the requirements that required it to be vetted by the NaCC or the South African Competition Commission. 

“The requirement to make such an application does not relate to the magnitude of the transaction, but rather whether control is relinquished to the acquiring party. Neither the Namibian nor the South African Competition legislation requires a merger application under these specific circumstances. (See section 42(1) of the Namibian Competition Act),” FlyNamibia’s Corporate Affairs and Marketing Manager Maija-Liisa Hangala-Shimwino told The Brief. 

“Both FlyNamibia and Airlink remain extremely sensitive to the regulatory requirements within its required operating environment. This is especially true for any possible infringements of the applicable competition legislation in both South Africa and Namibia, and they therefore conduct their business under competent legal advice at all times.” 

She said the airline was only obligated to inform the Transportation Commission and the Namibia Civil Aviation Authority, of the deal.

“There remain only two possible regulatory bodies that may have an interest in such a transaction, being the Transportation Commission and the Namibia Civil Aviation Authority. The Transportation Commission procedure relating to the issuance of Air Services Licences and the NCAA issues airlines with an Air Operating Certificate. 

“The relevant transaction did not trigger any peremptory statutory approvals to be sought. The Transportation Commission would, however, be fully briefed during a meeting with that body at 18h00 on 29 September 2022. The NCAA shall be briefed and as soon as the time for a meeting is suitable for the parties,” she said. 

From its Johannesburg O.R. Tambo hub, Airlink serves Windhoek with four daily flights and Walvis Bay daily. 

From Cape Town, Airlink operates up to three daily flights to Windhoek and daily to Walvis Bay. 

FlyNamibia, which operates domestic flights from Windhoek’s Eros Airport to Ondangwa, Rundu, and Katima Mulilo, and six weekly flights from Windhoek to Cape Town, is the scheduled airline division of Westair Aviation, established in 1967, initially as an aircraft maintenance facility.

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Last modified on Wednesday, 05 October 2022 23:54

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