Sakeliga win BEE case against Air Services Regulator

In a consequential BEE victory for Sakeliga and the aviation industry, the Pretoria High Court declared it unlawful to subject air service licences to B-BBEE or race-based criteria.

This court order increases commercial freedom and the availability of air services to all in South Africa.

The court awarded costs against the Air Service Licensing Council (ASLC), the first respondent. The ASLC is a statutory body responsible for the licensing of domestic air services providers, including passenger services, medical services, cargo services, fire-fighting services, drone services, and more.

Since at least December 2023, the ASLC had been denying and/or frustrating domestic air service providers’ licences by insisting on B-BBEE certification and transformation undertakings.

Denying licences based on BEE is contrary to the ASLC’s statutory mandate in the Air Services Licensing Act 115 of 1990. The Act prescribes that the ASLC must issue licences whenever an applicant complies with requirements on safety, residency, and control and registration of aircraft, and precludes the ASLC from adding additional requirements.

There is no basis in law for making race, transformation, or B-BBEE a prerequisite for air service licences. By introducing licensing criteria that have nothing to do with operational standards and accountability, the ASLC’s licensing practices had compromised commercial freedom and the availability and safety of local aviation services.

After the ASLC ignored Sakeliga’s warnings for a year, we filed litigation in November 2024, and have now prevailed.

First court order against 3rd Wave BEE

The order is the first to curtail an instance of 3rd Wave BEE, in which regulators unlawfully seek to make BEE a precondition for private commercial activity.

The 3rd Wave of BEE contrasts with the First and Second Waves of BEE, which were non-statutory or largely applied to businesses seeking state contracts (and their suppliers).

Since roughly 2018, regulators and officials have sought to increase the scope of business licencing, while simultaneously tying those licenses to BEE requirements, effectively trying to turn BEE into a prerequisite for participation in the economy.

For more information on 3rd Wave BEE, watch our five-minute explainer video here.

Additional order against regulator’s prohibition of recordings**

The court also declared unlawful the ASLC’s prohibition on the use of electronic devices during hearings and on making recordings of interactions with staff.

This part of the order followed Sakeliga’s discovery that the ASLC had expressly prohibited applicants from recording their licensing application hearings and bringing any electronic equipment with them. This, despite the fact that the Act stipulates that the hearings should be public.

During and between hearings, applicants found themselves confronted with arbitrary and verbal demands regarding BEE and transformation, which often appeared nowhere on paper.

International air services also affected

Since initiating our investigation late in 2023 into the harmful and unlawful conduct of the ASLC regarding domestic air services licences, we identified similar unlawful conduct regarding international air services in South Africa.

The ASLC’s counterpart for licensing of international air services, the International Air Services Council (IASC), has been making BEE demands of major international airlines and local companies engaging in international air services. Affecting airlines from the Americas, Europe, Australia, Africa, the Middle East, and East Asia, this has caused significant diplomatic unease.

Sakeliga is in an advanced stage of legal preparations to challenge the IASC requirements on grounds similar and additional to those in the ASLC case.

Additionally, we are also considering options in what appears to be potentially harmful race-restrictive requirements by yet other regulators and other state entities, not only related to aviation but in several other sectors.

About Sakeliga litigation

Sakeliga’s litigation curtails, stops or rolls back harmful state policy and conduct, and seeks alternatives to failing state services, for public benefit. We work for a sound economic order serving flourishing communities.

Resources

Click here for the notice of motion, granted by order of the court.

Click here for the complete court filings.