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Anti-competitive SAA to pay R55m penalty

South African Airways (SAA) has agreed to pay a R55-million administrative penalty for contravening the Competition Act, the Competition Commission said on Wednesday.

The airline will have to pay the whole amount before the end of May next year, said spokesperson Liziwe Konyana.

”The commission found that the bilateral agreements between SAA and Lufthansa created a platform for them to fix the selling price of air tickets on their flights between Cape Town, Johannesburg and Frankfurt,” said Konyana.

SAA also induced suppliers not to deal with competitors, she said.

The airline agreed to pay R20-million for abusing its dominance regarding override commission and trust payment agreements between SAA and travel agencies.

SAA and SA Express will jointly pay an additional administrative penalty of R20-million for the agreed simultaneous implementation of an identical fuel surcharge levy amounting to the price fixing of both domestic and international flights.

The airline also agreed to pay R15-million for entering into agreements with travel agents on terms that would induce them not to deal with competing airlines.

SAA will also implement a compliance programme to ensure its employees and directors are informed of, and comply with, their obligations under the competition law and provisions of the Act.

”The commission believes that SAA’s anti-competitive conduct will be adequately addressed by their commitment not to return to their ‘bad’ conduct,” she said.

The commission has referred the consent agreements to the Competition Tribunal requesting that they be made consent orders. — Sapa

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