Budget carriers in airport brawl

2010-02-13 12:13

THE consumer may yet emerge as the big winner of the commercial

brawl between the country’s two privately held low-fare airlines kulula.com and

1time.

kulula and 1time are haggling over rights of access to Lanseria

Airport, SA’s only non-state commercial airport.

SA’s foremost consumer ­watchdog, The National Consumer Forum (NCF)

said this week it would support any initiative that enhances competition in the

­marketplace.

“Hopefully that battle will force prices down and the consumer

emerges as the winner,” said NFC chairperson Thami Bolani.

He said competition in the airline industry had delivered good

prices and better service levels for ­travellers.

Flourice Olivier, airline buying manager at Seekers Travel, said

the current arrangement whereby ­kulula has carte blanche over ­Lanseria was

undesirable.

“Right now, kulula can charge ­anything they want which cannot be

good for the consumer.

“It is only fair that other airlines are allowed to go in there.

Who knows, we may even see airfares come down,” he said.

The Association of SA Travel Agents (Asata) said it was

­disappointed by the level of debate over the matter thus far.

Asata president Laurie ­Wilkenson said: “All we have seen so far

are the airlines slagging each other about just how bad they are.

“While at this stage Asata has not officially formulated a position

on the issue, we are inclined to support any move that enhances competition and

hopefully benefits the ­consumer.”

At the heart of the dispute is a contract that grants kulula

exclusive rights to operate domestic commercial flights from Lanseria – an

agreement valid in law but found “anti-competitive” by the Competition

Commission.

The commission, however, did not refer its findings to the

­Competition Tribunal, to the ire of 1time.

A referral would likely have had the effect of the tribunal

endorsing the commission’s finding, which would probably have resulted in the

exclusive arrangement being ­declared a prohibited practice.

The commission however chose not to refer its findings, arguing

that the agreement between kulula and Lanseria “was necessary to enable

kulula.com to breakeven”.

kulula contends that it is entitled to make some return on the risk

and investment it made into Lanseria.

The airline and partners put in R100?million to get Lanseria to

meet the high demands of commercial and international aviation, said Heidi

Brauer, the executive manager for marketing at Comair, kulula’s parent

company.

“There has had to be upgrades to the runways and taxiways as these

were initially not set up to take jets such as the 737 that we run.

“The whole place was given a face-lift with extra IT systems, new

check-in desks, sufficient parking and access roads,” she said.


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