SAA has hit back at Comair
– following Comair’s High
Court legal challenge, which
was dismissed earlier this
month – lodging a claim with
the Competition Commission
questioning the payment of
incentives by Comair to travel
agents.
In 2005, the Competition
Commission fined SAA for
an abuse of dominance
centred on its use of loyalty
override agreements with
travel agents. According
to SAA, Comair’s current
incentivisation scheme is
similar to SAA’s in 2005.
Erik Venter, ceo of Comair,
argues, however, that SAA
still has approximately 70%
of domestic sales through
BSP, making it impossible
for Comair to be deemed
dominant in this market
segment. “Furthermore, the
conditions imposed by the
Commission on SAA were
specific to SAA.”
This move by SAA comes
as Comair is consulting legal
counsel to decide whether
it will appeal the High Court
ruling that dismissed the
carrier’s legal challenge of the
R5bn government guarantee
granted to SAA.
Judge Hans Fabricius
dismissed Comair’s challenge
saying the ministers acted
legally in their decision to
grant government guarantees
for SAA.
He said the ministers
needed to take into account
the consequences for the
economy if SAA could
no longer function.
The consequences of the
judgment should be of great
concern to taxpayers, Erik
says. “The ruling confirmed
that the Minister of Finance
has no obligation to record
the rationale for his decisions
and that government does not
have to take its own policies
into consideration.” He adds
that, in a nutshell, SAA can
receive unlimited guarantees
without any expectation of
the airline ever repaying the
resulting loans.
