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Minister must consider job losses in 1time deal - Solidarity

23rd January 2013

  

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Trade union Solidarity on Wednesday called on Transport Minister Ben Martins to consider embattled airline 1time’s about 540 former employees in his decision on whether or not to allow UK-based FastJet to buy the airline.

Last year, FastJet signed an option agreement to buy 1time after it was placed under provisional liquidation, in November.

1time submitted an application to the Air Services Licensing Council (ASLC), a division of the Department of Transport, to be exempted from subsection 16(4)(c)(ii) of the Air Services Licensing Act of 1990 to enable FastJet to become its majority shareholder.

The legislation stipulates that a local licence holder must be 75%-owned by South African residents.

“However, it seems that FastJet wants a majority share in the company, which could result in the failure of the transaction and, in turn, mean that there is no further hope for the nearly 540 people who lost their jobs when 1time closed its doors.

“The Minister of Transport can, by law, instruct the ASLC to make an exception and award a licence even if the airline’s shareholders are not South African residents,” Solidarity spokesperson Marius Croucamp said in a statement.

He indicated that the trade union was concerned that the Minister would decide against such a concession.

“Strict legislation and the State’s monopolistic behaviour in the airline industry, which includes the State’s continued financial support of South African Airways (SAA), forces free-market competitors out of the market. The demise of SAA’s competitors also serves as an important deterrent to potential investors who would perhaps still have wanted to enter the aviation industry,” Croucamp stated.

He asserted that if the Minister did not make the concession, it would be a clear indication that government would safeguard SAA, eliminating competition.

Most of South Africa’s large airlines have formally objected to FastJet entering the local market, citing overcapacity and increased credit risk, besides others. ASLC would meet next month to hear arguments for and against the transfer of 1time’s licence to FastJet.

Meanwhile, the creditors of 1time’s aircraft maintenance subsidiary, Jetworx, had agreed to sell its shares to an affiliate of the American Industrial Acquisition Corporation, ensuring the jobs of about 200 of Jetworx’ employees for at least the next six months.

The retrenchment of nearly 200 of Jetworx’ estimated 400 employees was halted when it was placed under business rescue, in August.

“The new owners are expected to come to South Africa next week and the necessary agreements will be drawn up. We hope that Jetworx will be in a position to retain its employees after this period, and that further retrenchments or restructuring will not take place at the company,” Croucamp indicated.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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