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Competition Commission investigates airline collusion allegations
THE Competition Commission has initiated an investigation against major airlines.
BA Comair, South African Airways, 1Time, SA Airlink, Mango and SA Express for allegedly colluding on prices and pricing strategies to be adopted during the FIFA 2010 World Cup.
The notice issued by the Commission states:
In its application SAA gave the Commission e-mail correspondence between the airlines in which there are indications that the airlines might adjust air fares ahead of the World Cup.
In particular, the e-mail suggests that since there is no indication as to which flights will represent peak demand flights, airlines have the option to either not provide any inventory for sale until such time, or price all inventory at peak time rates until such time as they have greater certainty. This e-mail also suggests that airfares will have to be raised in order to cover various anticipated additional costs.
The Commission will investigate the allegations made by SAA and circumstances surrounding the allegations to determine if the airlines have colluded to increase prices or adopt similar pricing strategies ahead of the World Cup. If it finds that they have, the Commission will refer the case to the Competition Tribunal for a hearing and request an appropriate penalty.
Both SA Express and Comair have responded denying any collusion. SA Express spokesperson Dileseng Koetle says the airline has been involved in discussions, under the auspices of the Department of Transport, regarding capacity requirements for 2010, but added that this was simply to ensure adequate fleet planning.
Comair, said spokesperson Heidi Brauer, has not yet received the complaint from the Commission. "Comair neither practices nor supports any form of collusion and will cooperate fully with the Competition Commission once the complaint has been received."
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