South African Competition Commission launches enquiry into SAA and BA after price fixing allegations ahead of the 2010 FIFA World Cup
The South African Competition Commission has launched an enquiry into allegations of price fixing by South African Airways, British Airways/Comair, 1Time, SA Airlink, SA Express and Mango. The enquiry comes after a barrage of complaints to the Presidential Hotline from consumers.It has also been reported that SAA has approached the commission with information that implicates other airlines – in exchange for leniency. SAA has been previously found guilty of price fixing in 2006.
An industry insider has revealed that, although this is a step in the right direction, the Commission will most likely not have any effect until after the World Cup.
During the run up to the FIFA Final draw in December 2009, domestic and international airfares increased dramatically.It was widely reported that this was due to the “block-booking” or reservation of seats by the respective football teams – since the exact locations of their matches were not known.The public initially expressed concern about the increases, but were led to believe that the prices would normalise after the final draw – since the various teams would be able to plan their accommodation accordingly.
Well, roll on the January 2010. The draw has come and gone and the cost of domestic and international flights has remained at the high levels. A flight from Johannesburg to Cape Town (2 hour flight) has increased by up to 80 per cent.
Sue Botes, British Airways commercial manager in South Africa, says that their flights are not overpriced and that travellers wishing to travel to South Africa during the World Cup will not be charged more than their peak season prices. A quick search on various price comparison websites reveals that an economy return flight from London to Cape Town during July will set you back up to £1500 – therefore representing a increase of more than 50 per cent on the average peak season fare.
The general perception amongst South Africans is that the World Cup will somewhat offset the effects of the recessionary economy, but many sectors have already expressed concern about the high cost of travelling to South Africa. Cape Town Tourism CEO Mariette du Toit-Helmbold, remarked recently during a radio interview that the price hikes were a barrier for foreign fans wanting to visit South Africa during the World Cup.
