SA Airlink excessive pricing case heads for tribunal

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The commission referred SA Airlink to the Competition Tribunal on charges of excessive and predatory pricing after an investigation following complaints by regional carrier Fly Blue Crane and other parties.

Fly Blue Crane has not been operational and in business rescue since February 2017.

The complainants alleged that SA Airlink, as the dominant carrier on the Johannesburg-Mthatha route, charged excessive prices for its service, but when Fly Blue Crane began operating the route it lowered its prices below its costs, a practice known as predatory pricing.

This forced Fly Blue Crane to abandon the route in January 2017.

After Fly Blue Crane exited the route, SA Airlink raised its prices, again to excessively high levels, the complainants said.

The commission said SA Airlink's conduct contravened the Competition Act and amounted to an abuse of its dominance on the route from September 2012 to August 2016. "The effect of the predation is also likely to deter future competition on this route from other airlines," deputy commissioner Hardin Ratshisusu said in a statement.

Airlink CEO Rodger Foster denied the allegations and said the carrier welcomed the opportunity to put its case before the tribunal so that the matter could be put to rest.

The service between Mthatha and Johannesburg remained operational, he said.

The commission is seeking a penalty of up to 10% of Airlink's annual turnover.

Source: Business Day