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Johannesburg - The Competition Tribunal has paved the way for Comair and Nationwide to pursue a civil claim for damages against SAA in the high court.
In a statement on Thursday, the Tribunal said it had ruled that SAA's incentive scheme between June 1 2001 and March 31 2005 contravened the Competition Act.
The Tribunal found that the scheme, which consisted of override incentive agreements and trust agreements with travel agents, induced travel agents not to deal with SAA's rivals.
"This complaint was a follow-up complaint to that decided by the Tribunal in Competition Commission versus SAA in 2005," the Tribunal said.
"In that case, the Tribunal had evaluated SAA's agreements with travel agents in the marketplace from 1999 to 31 May 2001."
The Tribunal imposed an administrative penalty of R45m on SAA in that case.
The latest decision involved two complaints referred to the Tribunal.
The first was by Comair, and resulted in a settlement agreement between the Competition Commission and SAA, which paid a penalty of R15m.
However, in the agreement SAA did not admit to any contravention of the Act.
"The second complaint was referred by Nationwide directly to the Tribunal and dealt with SAA's agreements from June 2001 onwards (the period after the first Nationwide decision).
"Nationwide was of the view that the Commission had not referred and the Tribunal had not adjudicated all aspects of its complaint in the first Nationwide decision."
Dealt with allegations
The Tribunal found that Comair's allegation of "ongoing conduct" from 1999 to May 31 2001 was dealt with in the first Nationwide matter.
As a result, it could only consider SAA's conduct for the period June 1 2001 until March 31 2005, when SAA continued to have override incentive agreements and trust agreements with travel agents in the domestic airline travel market.
"The Tribunal found that, during this period, SAA was still overwhelmingly dominant in the scheduled domestic airline travel market and was presumptively dominant in the purchase of travel agent services for airline tickets.
"We have examined this scheme in light of market developments during the period June 1 2001 until March 31 2005 and have concluded that not only was this scheme in contravention of section 8(d)(i), but resulted in ongoing foreclosure effects in the domestic airline travel market," the Tribunal said.
It said SAA had sought to "lock in" the gains it had made in the earlier period with this scheme and "immunise" its fares distributed through travel agents against competition.
"This inducement foreclosed SAA's rivals from the domestic airline travel market, the impact of such foreclosure likely to be greater in that segment of the air travel market that was distributed by travel agents."
The Tribunal said there was no need for it to conclude whether the scheme resulted in harm to consumer welfare.
"However, the fact that SAA's revenue share of the market was higher than its passenger share because it carried more high yielding passengers tends to suggest that consumers were harmed by paying higher prices or making poorer choices."
The Tribunal said SAA had already paid R15m and that the parties to the proceedings had not asked for a further penalty.
- Sapa
