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GEN - Competition Commission - Press Release
Press Release
28 January 2010
Competition Commission investigates collusion amongst airlines
The Competition Commission has initiated an investigation against major
airlines BA/Comair, South African Airways, 1Time, SA Airlink, Mango and SA
Express for allegedly colluding on prices and pricing strategies to be adopted
during the FIFA 2010 World Cup tournament.
The investigation follows a leniency application by South Africa Airways
(SAA), in December 2009, in which SAA undertakes to fully cooperate with the
Commission in exchange for leniency from prosecution under the Competition Act.
In November 2009, the Office of the President also requested the Commission to
look into concerns that airlines planned to escalate their air fares during the
World Cup.
In its application SAA gave the Commission e-mail correspondence between the
airlines in which there are indications that the airlines might adjust air fares
ahead of the World Cup. In particular, the e-mail suggests that since there is
no indication as to which flights will represent peak demand flights, airlines
have the option to either not provide any inventory for sale until
such time, or price all inventory at peak time rates until such time as they
have greater certainty. This e-mail also suggests that air fares will have
to be raised in order to cover various anticipated additional costs.
"The Soccer World Cup tournament provides South African business with a good
opportunity to showcase our international competitiveness, an opportunity
which could have positive and lasting benefits. But it is also possible that
some firms might want to exploit the situation by engaging in anti-competitive
conduct. The Commission is obliged to investigate all legitimate complaints
in such instances," says Commissioner Shan Ramburuth.
The Commission will investigate the allegations made by SAA and circumstances
surrounding the allegations to determine if the airlines have colluded to
increase prices or adopt similar pricing strategies ahead of the World Cup.
If it finds that they have, the Commission will refer the case to the
Competition Tribunal for a hearing and request an appropriate penalty.
ENDS
Further info:
Keitumetse Letebele, HOD: Communications
012 394 3183 / 082 783 3397 / keitumetsel@compcom.co.za
Date: 28/01/2010 16:13:48 Produced by the JSE SENS Department.
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