The Portfolio Committee on Transport has raised concerns over what it calls “predatory pricing” and overbooking practices in South Africa’s low-cost airline sector, suggesting that deregulation had failed to benefit poor travellers as originally intended.
The transport committee received briefings on anti-competitive behaviour in the low-cost carrier market during a joint meeting with the Portfolio Committee on Trade, Industry, and Competition on Tuesday, April 1.
The National Consumer Commission (NCC) was currently investigating these concerns, but the committee believed a full parliamentary enquiry might be necessary. Legal counsel would also be sought on the best course of action.
The NCC launched an investigation into FlySafair in January after the airline admitted to overbooking flights in a social media post, sparking outrage on social channels among passengers, as reported by Travel News.
Following the committee meeting, Committee Chairperson Donald Selamolela expressed disappointment in how deregulation had played out, stating that it had led to "unmitigated chaos where the only thing that matters is accumulation of profit".
Selamolela said some low-cost carriers were benefiting from regulatory advantages meant for budget airlines while charging passengers full-service airline prices.
No advantages
“…No player should enter the arena on a low-cost model and then abruptly decide they will play in a different league,” said Selamolela.
“The low-cost carrier industry does not need a bully who just violates the law. Inaction on this matter will not help us resolve anything. Crucially, we ought to be able to answer the question of what makes these low-cost carriers budget airlines. The situation where one got benefits of being a low-cost carrier and yet charges at full-service cost should be disallowed.”
However, an airline insider told Travel News that, in reality, in South Africa there were no benefits or advantages at all for budget carriers and that all airlines operated off the same level playing field, both budget and legacy carriers.
Parliament is now calling on aviation industry entities and government departments to propose legislative amendments to ensure that the low-cost model results in affordable travel for South Africans.
All key stakeholders, including the NCC, the Competition Commission, the Department of Trade, Industry, and Competition, and the Department of Transport, were present at the meeting. A follow-up meeting has been scheduled with low-cost airline representatives.
“We want legislation that truly improves the conditions of our people,” Selamolela concluded.
Kirby Gordon, Chief Marketing Officer of FlySafair, told Travel News that the airline would wait for any processes to conclude before addressing the outcomes.
