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

The new CEO of RwandAir takes up office

The outgoing Chief Executive Officer of RwandAir, Chance Ndagano has officially handed over to Yvonne Manzi Makolo after her appointment as the new Chief Executive Officer of RwandAir last Friday.

ATNS official elected to key Industry position

Air Traffic and Navigation Service (ATNS) SOC Senior Air Traffic Controller, Peter Van Rooyen, has been elected Executive Vice-President of the International Federation of Air Traffic Controllers' Associations (IFATCA).

Emirates renews its support to Mauritius and Seychelles

Emirates has announced its renewed support to Mauritius and the Seychelles by extending its global marketing agreement with the respective Tourism Boards of the two countries.

Global standards, collaboration are key to future of ground handling

The International Air Transport Association (IATA) has highlighted three key priorities for the ground handling industry to support the growing demand for air travel: harmonizing global standards to improve safety, improving

SAA retains 4-Star Skytrax ranking

South African Airways (SAA) has maintained a 4-Star Skytrax ranking, in both Business and Economy Class, for a 16th consecutive year.

Aviation Africa 2018: Cyber security: Not if, but when

An airline’s greatest cyber-security threat may also be its most precious asset – its staff – according to panellists speaking at Aviation Africa in Cairo. Victoria Moores reports.

TAA SK0902311218
See us at
Global Aerospace BT010518AAD2018 BTAirCargoAFA_BT220318210219