South Africa’s national air carrier South African Airlines (SAA) has signed a consent order with the competition commission to pay R55-million in administrative penalties for fixing prices and fuel-levy charges on flight tickets.
The airline was also penalised for abusing its dominant position in the domestic market by encouraging travel agents to increase their sales of SAA tickets at the expense of other airlines.
An investigation by the commission found that bilateral agreements created a platform for SAA and German airline Lufthansa to collude and that the airlines had used the opportunity to fix the selling price of air tickets on their flights between Cape Town/Johannesburg and Frankfurt. This happened through meetings and communications where price changes and the harmonisation of fares were discussed.
The commission also found that SAA and three other members of the Airlines Association of Southern Africa (AASA) — SA Express, Comair and SA Airlink — were guilty of colluding to fix an identical fuel surcharge levy on tickets for both domestic and international flights.
Comair received immunity from prosecution for testifying against the other airlines.
Apart from paying R55-million in administrative penalties, SAA has agreed to implement a compliance programme to ensure that its business operations comply with the Competition Act and to refrain from price-collusion with any of its competitors and stop the practice of inducing suppliers not to deal with competitors.
The commission has referred the consent agreements to the Competition Tribunal, requesting that they be made consent orders. — I-Net Bridge