Comair denies price collusion

2010-01-29 12:46

Comair, 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, last year.

“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 kulula.com (owned by Comair) ran a sale which

covered part of the World Cup period and in which more than 100 000 seats were

sold at between R299 and R399.”

Comair said it would co-operate fully with any investigation.


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