Legal victory against “Third Wave of BEE” in South Africa

The Pretoria High Court has declared it unlawful to subject air service licences to Broad-Based Black Economic Empowerment (B-BBEE) or race-based criteria.

This ruling came after Sakeliga challenged the Air Service Licensing Council’s (ASLC’s) decision to use B-BBEE certification as part of its service providers’ licences process.

The ASLC is a statutory body responsible for the licensing South African domestic air services providers, including passenger, medical, cargo, fire-fighting, and drone services.

Sakeliga said the ASLC had been denying 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,” Sakeliga said.

The Act prescribes that the ASLC must issue licences whenever an applicant complies with requirements on safety, residency, and control and registration of aircraft.

Sakeliga argued that it precludes the Air Service Licensing Council from adding additional requirements, like BEE and transformation requirements.

“There is no basis in law for making race, transformation, or B-BBEE a prerequisite for air service licences,” it said.

“By introducing licensing criteria outside of operational standards, the ASLC had compromised commercial freedom and the availability and safety of local aviation services.”

Sakeliga said it communicated its concerns with the Air Service Licensing Council. However, these warnings were ignored. It then filed litigation in November 2024.

On 5 August 2025, the Pretoria High Court declared it unlawful to subject air service licences to B-BBEE or race-based criteria. It awarded costs against the ASLC.

“This court order increases commercial freedom and the availability of air services to all in South Africa,” Sakeliga said.

The fight against the ‘Third Wave BEE’

Sakeliga said this court order is the first to curtail an instance of Third Wave BEE, in which regulators unlawfully seek to make BEE a precondition for private commercial activity.

The third wave of BEE contrasts with the first and second Waves of BEE, which were non-statutory or largely applied to businesses seeking state contracts.

Since 2018, regulators and officials have sought to increase the scope of business licensing, while simultaneously tying those licenses to BEE requirements.

Through these initiatives, the government and other institutions are effectively trying to turn BEE into a prerequisite for participation in the economy.

Sakeliga said this court victory is only the first step in its fight against BEE requirements in the air services industry in South Africa.

The ASLC’s counterpart for licensing of international air services, the International Air Services Council (IASC), has also been making BEE demands.

These demands affect 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 to and additional to those in the ASLC case.

“Additionally, we are considering options regarding potentially harmful race-restrictive requirements imposed by other regulators and state entities,” it said.

ASLC was not available for comment. Comment will be added if received.