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Claim against SAA 'will be easy'

Johannesburg - All that Comair [JSE:COM] and liquidators of the defunct Nationwide Airlines have to prove in a possible civil claim against South African Airways (SAA) is the amount of damages they suffered as a result of anticompetitive behaviour between 2001 and 2005.

The Competition Tribunal ruled on Wednesday that SAA contravened the Competition Act during this period. This opened the way for Comair and Nationwide - who applied to have the state-owned airline company declared guilty of anticompetitive conduct - to sue it for civil damages in the High Court.

"The SAA deal with the travel agency industry had a very significant impact on our business at the time," said Comair joint CEO Gidon Novick on Thursday. "So it makes for a very significant claim against them."

Novick said the nature and longevity of the agreement, in which SAA unduly incentivised travel operators to book clients on its own flights, was effectively designed to ensure that Comair and other airline operators would not be able to grow their businesses in South Africa.

Comair has previously estimated its damages at around R1bn. However, the lack of a guilty verdict prevented Comair and Nationwide from claiming damages.

"We'll now sit down with our lawyers and quantify the damages before filing with the High Court," said Novick.

He said this would happen "soon" as Comair has already done the groundwork. "We only need to prove the amount of damages, not if any damage occurred in the first place."

This would significantly shorten legal proceedings, making for a speedier resolution of the long-standing matter in which SAA has already been fined about R100m by the tribunal.

Nationwide has since been liquidated, after technical problems grounded its fleet.

The latest Competition Tribunal ruling adds to SAA's string of competition-related legal problems. The company's 2009 annual report is littered with details of antitrust (anticompetition) legal battles in five countries on as many continents, amounting to possible claims of over R100m.

Any claim by Comair and Nationwide - and possibly any other airline that may choose to join or initiate its own separate claim against SAA - is likely to be the biggest anticompetition civil claim in South Africa's legal history.

- Fin24.com

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