SAA faces massive fine
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Is SAA's R100m fine by commission just a legal nicety?
May 25, 2006 By Jabulani Sikhakhane
Although the R100 million that SAA has to pay to the competition commission may be regarded in some quarters as amounting to little more than a book entry among various government departments, it does represent a significant dent to SAA.
Not only a dent to its finances, but one to its reputation.
Again, it has to be pointed out that the agreement between the commission and SAA does not include an admission of guilt by the airline. However, many people will regard this as a legal nicety rather than a reflection of the way SAA behaved in the market place.
While the R100 million penalty is important in the short term, as a means of discouraging anti-competitive behaviour by SAA and other dominant players in the longer term, the more significant aspect of the agreement is the undertakings by SAA to implement compliance programmes to ensure that its business practices comply with the Competition Act.
It would be rather sad if SAA interpreted this commitment as needing to employ lawyers and economists to tell it what sort of behaviour it should not be caught indulging in.
There is the danger that such a compliance programme would become like so many other box-ticking exercises that the corporate world gets involved in. Most of these exercises lack any substance.
Much more effective would be experts on organisational behaviour, who could unpack SAA's practices to identify and alter practices that inevitably encourage anti-competitive behaviour.
All three of the anti-competitive cases brought against SAA relate to periods before Khaya Ngqula took charge of the airline. With any luck, Ngqula will use this agreement to launch a new, more pro-competitive approach from SAA.
The alternative is the awful prospect of continued regular trips to Pretoria by all concerned, including journalists, to listen to ever more anti-competitive allegations against SAA.
http://www.busrep.co.za/index.php?fS...icleId=3260908
Although the R100 million that SAA has to pay to the competition commission may be regarded in some quarters as amounting to little more than a book entry among various government departments, it does represent a significant dent to SAA.
Not only a dent to its finances, but one to its reputation.
Again, it has to be pointed out that the agreement between the commission and SAA does not include an admission of guilt by the airline. However, many people will regard this as a legal nicety rather than a reflection of the way SAA behaved in the market place.
While the R100 million penalty is important in the short term, as a means of discouraging anti-competitive behaviour by SAA and other dominant players in the longer term, the more significant aspect of the agreement is the undertakings by SAA to implement compliance programmes to ensure that its business practices comply with the Competition Act.
It would be rather sad if SAA interpreted this commitment as needing to employ lawyers and economists to tell it what sort of behaviour it should not be caught indulging in.
There is the danger that such a compliance programme would become like so many other box-ticking exercises that the corporate world gets involved in. Most of these exercises lack any substance.
Much more effective would be experts on organisational behaviour, who could unpack SAA's practices to identify and alter practices that inevitably encourage anti-competitive behaviour.
All three of the anti-competitive cases brought against SAA relate to periods before Khaya Ngqula took charge of the airline. With any luck, Ngqula will use this agreement to launch a new, more pro-competitive approach from SAA.
The alternative is the awful prospect of continued regular trips to Pretoria by all concerned, including journalists, to listen to ever more anti-competitive allegations against SAA.
http://www.busrep.co.za/index.php?fS...icleId=3260908
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SAA handed R15 mil fine
I wonder if this even hurts SAA?
SAA fined R15m for agent payments
Mon, 04 Dec 2006
The Competition Tribunal on Monday confirmed a consent order that imposed a R15-million fine on South African Airways for anti-competitive practices, the tribunal said in a statement.
The tribunal came to the decision after allegations made by Comair against SAA were investigated by the Competition Commission.
Comair has alleged that SAA was compensating travel agents for their services.
"Comair alleged that SAA was dominant in the market for domestic airline travel and that it used this dominance to engage in exclusionary practices in contravention of the Competition Act."
Challenged consent order
The consent agreement states that SAA would no longer include incentive payments in its agreements with travel agents.
"SAA also undertakes to implement a compliance programme [and]... agreed to pay an administrative penalty of R15-million," it said.
Nationwide and Comair have challenged the validity of the consent order, arguing that it did not contain an admission of liability.
The airlines have also argued that the fine was too low.
According to the statement, Comair and Nationwide could lodge a civil claim through the tribunal.
SAA's total liability amounts to R100-million, including the R45-million from the Nationwide case, R15-million in respect of this consent order, and an additional R40-million for two other consent orders confirmed by the tribunal previously, the statement read.
Comair was not immediately available for comment.
Sapa
SAA fined R15m for agent payments
Mon, 04 Dec 2006
The Competition Tribunal on Monday confirmed a consent order that imposed a R15-million fine on South African Airways for anti-competitive practices, the tribunal said in a statement.
The tribunal came to the decision after allegations made by Comair against SAA were investigated by the Competition Commission.
Comair has alleged that SAA was compensating travel agents for their services.
"Comair alleged that SAA was dominant in the market for domestic airline travel and that it used this dominance to engage in exclusionary practices in contravention of the Competition Act."
Challenged consent order
The consent agreement states that SAA would no longer include incentive payments in its agreements with travel agents.
"SAA also undertakes to implement a compliance programme [and]... agreed to pay an administrative penalty of R15-million," it said.
Nationwide and Comair have challenged the validity of the consent order, arguing that it did not contain an admission of liability.
The airlines have also argued that the fine was too low.
According to the statement, Comair and Nationwide could lodge a civil claim through the tribunal.
SAA's total liability amounts to R100-million, including the R45-million from the Nationwide case, R15-million in respect of this consent order, and an additional R40-million for two other consent orders confirmed by the tribunal previously, the statement read.
Comair was not immediately available for comment.
Sapa
Last edited by putt for dough; 4th Dec 2006 at 15:15. Reason: spelling
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This isn’t a new fine, this is all about the confirmation of the consent order- which is a "plea bargain" for a complaint raised some time ago by Comair. They objected and the commission agreed to review the decision. They have and they stick by their ruling.
Comair has it knickers in a knot because this will make their civil claim all the more harder as they do not have an admission of guilt to enter into evidence. Now they are going to have to prove their case in civil court. Something I doubt they are going to be able to do.
I am sure they are going to persue it and its going to go on for years and cost them and SAA huge money. But then again its big bucks at stake.
Comair has it knickers in a knot because this will make their civil claim all the more harder as they do not have an admission of guilt to enter into evidence. Now they are going to have to prove their case in civil court. Something I doubt they are going to be able to do.
I am sure they are going to persue it and its going to go on for years and cost them and SAA huge money. But then again its big bucks at stake.
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Heard on Talk RAdio 702, an interview with G Novik where he indicated that Comair WAS definitely going to go for a "civil court case/claim" against SAA after the previous ruling.
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Things at SAA have changed from back in the day when this fine was imposed- one of the main reasons for the fine was SAA’s high handedness during proceedings, this really peeved the tribunal and they bit back. The people who were responsible are all long gone, the new team are not so stupid, Nuff said…..let the games begin!
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HEY DICK FOR BRAINS, THIS WAS A JOKE BASED ON FACTS, VB ALWAYS HAVE SOME EXCUSE NOT TO PAY HIS CREW BONUSES, INCREASES OR PERFORMANCE BONUSES
Look who's talking - the guy makes a comment in August 2005 and you take offence at it today, almost 18 months later. Chill that delayed-reaction moermeter of yours please. 4HP
info from huh ?????Look who's talking - the guy makes a comment in August 2005 and you take offence at it today, almost 18 months later. Chill that delayed-reaction moermeter of yours please. 4HP
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Anti Competative SAA
Does anyone know what happened to all those allegations against the SAA and their partners, with regard to them paying bribes etc to travel agents for booking on SAA first before considering other airlines?
We heard lots of rumours about them having been found guilty in certain circumstances and having to pay huge money to Nationwide. Comair was also in the mix for a payout, but have heard nothing since.
Just interested because Mango is also highly anti competitive with SAA backing them right up to SAA baggage tags on Mango luggage. Surely the private guys must be taking this further. Evidently you can book a Mango ticket and land up on a SAA flight. I know this happens at Kalula but they are not claiming separate companies.
South Africa I think is now the only Country in the world to have 3 state funded airlines, what happened to free enterprise?
We heard lots of rumours about them having been found guilty in certain circumstances and having to pay huge money to Nationwide. Comair was also in the mix for a payout, but have heard nothing since.
Just interested because Mango is also highly anti competitive with SAA backing them right up to SAA baggage tags on Mango luggage. Surely the private guys must be taking this further. Evidently you can book a Mango ticket and land up on a SAA flight. I know this happens at Kalula but they are not claiming separate companies.
South Africa I think is now the only Country in the world to have 3 state funded airlines, what happened to free enterprise?
