Comair: No price collusion

2010-01-29 12:26

Johannesburg - Comair [JSE:COM], which operates British Airways in SA, on Friday denied taking part in any collusive practice.

It had yet to receive a formal complaint from the Competition Commission regarding price collusion, it said in a statement.

The Commission announced on Thursday it was investigating collusion among local airlines on prices and pricing strategies to be adopted during the world cup.

"Despite no investigation having commenced, Airlink passed on to the media an e-mail, originating from Comair, on the assumption that this is the basis for the allegations by the Competition Commission," Comair said.

This e-mail, from joint Comair CEO Erik Venter, was in response to an e-mail from the transport department's Pule Selepe, advising the airlines the matter of alleged excessive pricing was to be raised at the aviation sub-sector task team meeting on November 26 2009.

"As I could not attend the meeting, the best that I could contribute to the debate was to set out Comair's concerns regarding the world cup, so that DOT had the benefit of our views," Venter said.

"At no stage have any meetings or discussions been held on working together on joint strategies."

Venter said the e-mail reflected textbook airline pricing principles that any commercial airline would implement, based on supply, demand and cost recovery.

"There is no suggestion whatsoever, of non-standard practices. In fact, the e-mail clearly states that Comair expects airline ticket prices to fall once the airlines have implemented their extra capacity for the world cup, and that the pricing is anticipated to average out at the level experienced over a typical South African peak holiday season."

Comair said its pricing over the world cup period was being managed as a function of supply and demand in the same way that its pricing was always done.

"It is anticipated that certain days will have excessively high demand and as such more flights have been added and prices have been set at rates consistent with other peak periods like long weekends and special events."

Likewise it was anticipated that many flights over the period would have very low demand and would be priced at heavily discounted levels, particularly if the estimated number of fans did not materialise.

"Earlier this week [owned by Comair] ran a sale which covered part of the world cup period and in which over 100 000 seats were sold at between R299 and R399." Comair said it would co-operate fully with any investigation.

- Sapa