Airlines deny price-fixing allegations

Tuesday, March 16, 2010

Cape Town - South African Airways (SAA) and sister airline SA Express have both distanced themselves from price collusion allegations ahead of this year's FIFA World Cup.

Appearing in front of Parliament's Portfolio Committee on Public Enterprises for the first time since the allegations surfaced in November last year, both airlines confirmed to have received an email from a competitor on the alleged scam.

SAA acting CEO Chris Wells said the email, dated 25 November 2009, contained "certain suggestions that could give rise to inferences of conduct that is in contravention of competition law".

Wells said following an assessment of the risks associated with the competitor's conduct, SAA informed the Competition Commission and applied for leniency in the event that the commission decided to refer the matter to the tribunal.

SAA maintained that it has not participated in a scam but had instead held discussions with various players in the airline industry on requirements for the World Cup at meetings convened by the transport department.

"The subjects in such discussions were limited to matters of logistics and capacity requirements during the FIFA World Cup," read an SAA document tabled in front of the committee.

SA Express, also pleaded innocence on the matter saying it had only participated on discussions confined to the airline's readiness for the tournament. Regarding the issue of baggage mishandling, both airlines said they were working to solve the problem.

SA Express CEO Siza Mzimela said the airline has seen a drop in baggage mishandling incidents from 21.5 bags for every 1000 passengers in 2007/2008 period to 15 bags for every 1000 passengers this year.

Mzimela said all the affected airlines were in constant meetings with both Airports Company South Africa and the ground companies that handle the baggage to address the problem

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