South Africa: SAA Price Collusion - Individuals Responsible Must Be Fired

Wikipedia
(file photo).
26 March 2012
Democratic Alliance (Cape Town)
press release

The Competition Commission has fined South African Airways (SAA) R18.8 million for colluding with Singapore Airlines to fix ticket prices between Singapore and South Africa.

This means that SAA has been found guilty of illegally inflating the price of their tickets to and from Singapore.

This fine relates to a 2008 complaint, and therefore predates the current administration at SAA. SAA's CEO, Siza Mzimela, should initiate an investigation to find those responsible for this decision; and they should be fired with immediate effect. It is completely unacceptable for a national carrier to collude with foreign competitors to rip off South Africans. It underlines the contempt SAA has for the South African public.

SAA also has other outstanding competition issues and could be liable for further damages if found guilty. The Competition Tribunal found SAA's incentive schemes to be in contravention of the Competition Act between 2001 and 2005. Currently, SAA is appealing the decision, but outstanding claims from rival domestic airlines, Nationwide and Comair, could lead to significant additional fines for SAA.

It is deeply ironic that SAA consistently asks for bailouts from the very people they have ripped off. In 2009/2010 SAA needed a R1.6 billion cash injection from government to stay afloat and now they have requested another bailout of between 4 and 6 billion rand.

SAA also needs to improve its management. Parliament's Portfolio Committee on Public Enterprises has requested on numerous occasions that SAA report back regularly to the committee to ensure proper oversight. Until now, SAA has failed to report back often enough.

SAA should report back to Parliament at least once every two months. I will write to the Chairperson of the Portfolio Committee on Public Enterprises, Peter Maluleka, to request that he compel SAA to report back first thing after Parliament's Easter recess is complete - and every two months after that.

SAA's performance can only improve with increased transparency and accountability. We need to hold those responsible who cheat South African consumers and mismanage our public entities.

Natasha Michael, DA Spokesperson on Public Enterprises

Read the original article on DA.

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