Airlink to be prosecuted for high fares

SA’s Competition Commission said yesterday it had referred SA Airlink, a privately controlled regional feeder airline, to the Competition Tribunal for prosecution on charges of “excessive and predatory pricing”.

This followed complaints lodged by businessperson Khwezi Tiya, low cost carrier Fly Blue Crane and the OR Tambo District Chamber of Business between 2015 and 2017 about the Johannesburg-Mthatha route.

“The complainants alleged that SA Airlink’s prices were excessive before Fly Blue Crane entered the route,” it said.

“It was also alleged that SA Airlink then lowered its prices below its costs when Fly Blue Crane entered the route. It was also alleged that SA Airlink went back to their exorbitant prices after Fly Blue Crane exited the route in January 2017.”

An investigation had subsequently found that SA Airlink contravened the Competition Act by abusing its dominance from September 2012, to August 2016, by charging excessive prices on the route to the detriment of consumers, who would have otherwise saved between R89 million and R108 million, said the commission.

“The predatory pricing conduct of SA Airlink contributed to the exit of Fly Blue Crane, their only competitor at the time on the Johannesburg-Mthatha route and the effect of the predation is also likely to deter future competition on this route from other airlines,” the commission added.

It said it was seeking an administrative penalty of up to 10% of SA Airlink’s annual turnover and had asked the tribunal to determine other appropriate remedies to correct the conduct. – ANA

The complainants alleged that SA Airlink’s prices were excessive before Fly Blue Crane entered the route. Competition Commission