in Business & Finance

Nationwide Airlines wins SAA anti-competition case

Posted 15 August 2016 · Add Comment

A South Gauteng High Court has awarded Nationwide Airlines ZAR104.6 million (USD7.89 million) in damages plus interest after ruling that South African Airways practices did breach South Africa's Competition Act and did inflict financial harm on Nationwide, reports ch-aviation.

 

Now in liquidation‚ Nationwide based its case on a 2010 Competition Tribunal finding that SAA abused its dominant market position to divert customers from competitors. It claimed that between June 2001 and March 2005, SAA had violated the terms of the country's Competition Act by paying commissions to travel agents thus diverting passengers away from competitor airlines.

SAA allegedly signed "override incentive agreements" with travel agents where the latter earned a percentage commission of the sale price. When sales reached a certain target set by SAA, an additional incentive was paid. There were also "trust agreements", to reward travel agent loyalty, Nationwide claimed.

SAA argued that Nationwide's losses were as a result of its public perception of an ageing and unsafe fleet. 

However, according to BusinessDay, in her ruling, Judge Caroline Nicholls said the Competition Tribunal and the Competition Appeal Court had acknowledged the shortcomings in Nationwide’s safety record, they had still determined that SAA’s abuse of its dominant position was "the major cause of the decrease in volume of Nationwide’s passengers".

In quantifying the damages to be paid to Nationwide, Judge Nicholls extrapolated how the carrier would have performed had SAA not curtailed its business. While Nationwide had claimed ZAR171.5 million (USD12.94 million) in damages‚ plus interest calculated from 2010 — a total of about ZAR325 million (USD20.36 million) — Judge Nicholls adjusted the amount downwards to take into account a strike at SAA in July 2005 and made a 25% deduction for "contingencies".

She subsequently awarded Nationwide ZAR104.6 million (USD7.89 million).

 

 

Copyright: Tis Meyer (PlanePics.org)

 

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

Sudan's glimmer of hope

For a decade, Sudan Airways has struggled to maintain services in the face of US sanctions against the African nation. Those sanctions have now been eased, but the airline still faces problems, as deputy general manager, Yasir Timo,

Aero South Africa set to go

Messe Friedrichshafen, the global show for general aviation, has set its sights on a new destination....South Africa.

Boeing and FedEx express announce order for 24 medium and large freighters

Boeing and FedEx Express today announced a new order for 12 767 Freighters and 12 777 Freighters as the world's largest air cargo carrier continues to invest in the industry's most capable freighters to better serve its customers.

Fastjet increases flights between Harare and Victoria Falls

Fastjet will increase its flights between Harare and Victoria Falls by two additional frequencies with effect from 2 July 2018, reports Afritraveller.

The battle for survival

More than 50 local airlines have emerged and collapsed since Nigeria’s independence in 1960 and, as Chukwu Emeke reports, the cycle looks set to continue.

Honeywell research shows growing investment in 'connected' technology

The commercial aviation industry is at the beginning of a technology investment wave fuelled by advancements in high-speed, in-flight Wi-Fi connectivity according to a new report by Honeywell released today.

TAA SK0902311218
See us at
AAD2018 BTAirCargoAFA_BT220318210219GroundHandling BT2205130918