SAA’s anticompetitive travel-agent scheme costs it more than R1bn
Comair’s case against SAA shows that competition law risks should not be ignored in considering pricing and incentives
On 15 February 2017, the South Gauteng High Court awarded Comair R554m plus interest at 15.5% on this amount, totalling about R1.16bn. This related to a case initiated against SAA 14 years ago over the national carrier’s anticompetitive travel-agent incentive schemes that were found to be in contravention of the Competition Act. Internationally, it has been accepted by competition authorities that anticompetitive arrangements can have lingering effects in an economy and on market participants. Comair sought compensation not only for the profits lost during the infringement period, but also for the profits foregone after its termination. Let us remind ourselves what exactly SAA did wrong. From 2000 to 2005, SAA concluded and implemented "override incentive schemes" with travel agents, paying them considerable sums to travel agents to book passengers on SAA rather than on rival airlines, such as Comair and Nationwide.
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