FlySafair’s claim all SA airlines overbook like them is rubbish – Miles vd Molen

Miles Van Der Molen, CEO of CemAir, discusses the controversy surrounding FlySafair's admission of overbooking flights in South Africa, which he claims violates local laws. He explains that overbooking is a common international practice but illegal here due to consumer protection regulations. The issue raises questions about industry ethics and enforcement. Van Der Molen spoke to BizNews editor Alec Hogg..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here.Watch here .Listen here.Highlights from the interview .In this interview, Alec Hogg speaks with Miles Van Der Molen, CEO of CemAir, about the ongoing debate surrounding overbooking practices in South African airlines, particularly FlySafair. FlySafair recently claimed that overbooking is common among South African airlines, which sparked controversy after some passengers were unable to board their flights. Van Der Molen, however, argues that overbooking is illegal in South Africa under the Consumer Protection Act (CPA) and that CemAir does not engage in such practices. He also highlights that FlySafair's business model may involve overbooking by reselling seats to passengers who don't show up, without offering any compensation to those affected..While overbooking is legal in many parts of the world, including the US and Europe, where airlines are required to compensate passengers, it is prohibited in South Africa. Van Der Molen emphasises that airlines should not manipulate check-in systems to their advantage, as this practice is both unethical and a violation of consumer rights. He further criticises FlySafair for publicly claiming that overbooking is standard practice, suggesting that such statements mislead the public..The interview also touches on the broader issue of South Africa's airline industry, which has a history of regulatory challenges and financial struggles. Van Der Molen calls for stronger enforcement of the country's laws to build confidence in the industry and prevent further abuses. He stresses that if regulations are not upheld, CemAir may reconsider its participation in the local market. The outcome of the regulatory investigations into FlySafair's practices will shape the future of the industry..Edited transcript of the interview ___STEADY_PAYWALL___.Alec Hogg (00:06.786)Go-to man on the airline industry, Miles Van Der Molen, CEO of CemAir , joins us now after the market leader in South Africa, FlySafair, claims that all airlines in South Africa overbook like they do. We'll find out if that's true or not..Alec Hogg (00:28.334)Miles, good to be talking with you. This story of overbooking—I've had experiences, and I suppose many South Africans have when they travel internationally. I remember one night in Zurich being offered 20,000 Rand to give up my seat and take a later flight. I grabbed it and was quite happy when I got home, as it even paid for the whole flight. It's not unusual; this happens internationally..But now we've got a debate in South Africa after FlySafair had some very angry customers who could not get onto a flight they had booked. FlySafair's statement was that everyone does it in South Africa. Now, you, CemAir—do you?.Miles Van Der Molen (01:18.735)Hey, nice to be on the show again, thank you. Overbooking is done in some regions. However, our reading of the Consumer Protection Act (CPA) is that it's illegal in South Africa, and we certainly don't do overbooking on flights. In fact, Airlink has come out with a statement similar to ours, saying that they don't overbook flights at all. So, our understanding is that it's not actually allowed. For FlySafair to go out and claim that everyone does it is concerning. It's very misleading..Alec Hogg (01:47.658)Explain why airlines overbook in the first place..Miles Van Der Molen (01:52.091)The idea is that some passengers won't show for their flight. If, say, 3% of passengers don't show, airlines might oversell by 3%, ensuring that the aircraft departs full and generates additional revenue. Airlines like FlySafair may have a higher rate of churn because they allow more flexibility up until the point of departure, which could result in more no-shows. My understanding of FlySafair's model, however, is that they are effectively selling the seat twice..Alec Hogg (02:25.06)How do you mean, "a hundred percent no-show"?.Miles Van Der Molen (02:27.747)If a passenger doesn't show, FlySafair doesn't offer any refund. They see it as lost revenue, but they keep that revenue and then oversell the flight in addition to it..Alec Hogg (02:45.988)So why would they make a statement like that, saying that "everyone does it," even though, as you mentioned earlier, this is illegal in South Africa?.Miles Van Der Molen (02:59.235)It's difficult to understand why they would admit to overbooking. Making a blanket statement that "everyone does it" is inappropriate—it's simply a lie. They shouldn't have done that; it's crossing the line..Alec Hogg (03:14.116)And why is it illegal in South Africa, but not in other parts of the world?.Miles Van Der Molen (03:19.963)I can't speak to that with full certainty, but the CPA here is clear: you can't oversell the capacity of a flight. In Europe and the United States, overbooking is allowed, but airlines are required to compensate passengers if they are bumped from a flight. That's really what you experienced in Zurich and the U.S..Alec Hogg (03:40.61)Exactly. In Cincinnati, for instance, when an airline was overbooked by 10 seats, they offered passengers $100, which went up to $1,000, and eventually a couple of thousand dollars, to get them to take a later flight. So, clearly, they take it very seriously there..Miles Van Der Molen (04:11.263)Yes, exactly—it turns into a bit of an auction. The counterbalance is that it becomes expensive for airlines if too many passengers show up. In those markets, compensation is legislated, and it can escalate from a minimum amount..In South Africa, however, we see airlines being very rigid with check-in cut-off times. This means passengers who are marginal on check-in times are offloaded, and then their seat seems to be resold. I recall a statement from FlySafair a few years ago where they denied overbooking, but clearly, this time they've admitted it..Alec Hogg (04:54.998)I remember a personal experience a few years ago trying to fly FlySafair. I was in a long queue, and then, after waiting, I was told that the flight was closed. But I wasn't told beforehand. I had to find another flight later..Miles Van Der Molen (05:19.309)Absolutely. If you have a long check-in queue, the airline can manipulate the system. If they know the flight is overbooked, they can manage the check-in rate to achieve the outcome they want. But that's not ethical..Alec Hogg (05:35.064)This brings us back to the broader issue about the ownership of airlines. FlySafair has garnered sympathy for being an efficient airline, despite its foreign ownership. But when it comes to overbooking, I wonder if those same supporters would feel the same if they were the ones affected..Miles Van Der Molen (06:17.795)Yes, if overbooking affects your convenience, it would definitely change your view on the airline. FlySafair is facing a number of issues. The Domestic Licensing Council has found them non-compliant with the ownership regulations, and there is also a matter before the Competition Commission. It's clear they have a unique approach to following the rules..Alec Hogg (06:43.524)Where does this come from, at a commercial level? From the parent company in Ireland?.Miles Van Der Molen (06:49.203)It's difficult to say. Ultimately, it's the responsibility of the CEO to ensure the company complies with local laws. If the parent company instructs you to break the rules, the local management must still uphold the law. Corporate responsibility and accountability are crucial..Alec Hogg (07:12.492)It feels like we've been "FlySafair-bashing" here, but I struggle to get them on air to give their point of view. One of the concerns from the Bizznews community is, if FlySafair were to pull out of South Africa, where would we be? We wouldn't have the capacity to service the market..Miles Van Der Molen (07:46.243)That's correct for now, but convenience cannot come above the law. If FlySafair isn't complying, that has to be dealt with. Yes, it would be a shock to the market, but they have gained a dominant position by using tactics that they shouldn't have. The law should be upheld..Alec Hogg (08:34.68)So, if I understand correctly, FlySafair has been breaking the rules, operating according to its own standards, and if called out, they'll claim it's a common practice?.Miles Van Der Molen (08:50.309)There's mounting evidence to suggest that's the case. They've admitted to overbooking, which is not speculation, and both councils have found their ownership structure to be improper..Alec Hogg (09:01.646)So, what happens from here? What's the next step?.Miles Van Der Molen (09:04.955)We'll have to wait and see. I believe the NCC is investigating, and they tend to act swiftly. The Domestic Licensing Council is having a meeting this week to move the matter forward. We're in the hands of these government bodies, and their decision will shape the industry's future..Alec Hogg (09:31.492)And what sanctions might there be?.Miles Van Der Molen (09:34.485)The NCC can impose fines, and the Licensing Council could suspend FlySafair's license, impose fines, or even file criminal charges. There's a broad range of sanctions available, depending on the actions they choose to take. There's no precedent for this, so it will set a trend..Alec Hogg (10:11.768)How long have you been running Seme?.Miles Van Der Molen (10:14.171)About 20 years..Alec Hogg (10:17.452)In that time, have you ever thought that the South African market is just too difficult to operate in, with all the predatory pricing, government subsidies, and now a foreign-owned player operating according to its own rules? Why is South Africa's airline industry so abused?.Miles Van Der Molen (10:55.867)It's a terrible record. In the past 30 years, about 30 airlines have started and closed. The industry's track record is a concern, and it needs to build confidence. Corporate responsibility needs to be at the core of the industry. Right now, the industry isn't creating sufficient value, and it's damaging public confidence..Alec Hogg (11:46.754)Why has it been allowed to continue like this? Why hasn't the government acted?.Miles Van Der Molen (11:53.306)Lack of regulatory enforcement and government oversight have allowed this to happen. The laws are there, but they haven't been enforced, which has allowed non-compliance to go unchecked..Alec Hogg (12:09.294)Well, Miles, I do appreciate your insight. We'll keep watching this story closely..Miles Van Der Molen (12:15.066)Thanks, Alec. It was a pleasure..Read also:.Mashaba merger moves for 2026 municipal elections…Expats face insecurity as unrest devastates Mozambique economyFire the GNU – Rob Hersov, Gerhard Papenfus explain why SA (still) isn't working

FlySafair’s claim all SA airlines overbook like them is rubbish – Miles vd Molen

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