SAA pays for pushing ‘little guy’ out the market

Johannesburg, 11 August 2016 - A precedent-setting ruling that will change competition rules in the commercial aviation industry is set to hit South African Airways' exhausted pockets hard.

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JOHANNESBURG – A precedent-setting ruling that will change competition rules in the commercial aviation industry, is set to hit South African Airways’ exhausted pockets hard.

The South Gauteng High Court has ruled that the national carrier is liable for over a R100-million in losses suffered by defunct airline, Nationwide.

READ: SAA terminates BnP Capital’s services

Nationwide Airlines is a failed budget carrier that ceased its operations in 2008 after accusing the SAA of dominance foul play.

The High Court in Johannesburg ruled in its favour saying the national carrier was in contravention of the Competition Act.

READ: Talks underway for possible merger at SAA

SAA had 45-percent of the market, but still made payments to travel agents to direct business away from Nationwide and Comair.

It’s believed these agreements covered between 56-percent and 76-percent of all travel agents by number, and between 70-percent and 90-percent when weighted by revenue or passenger numbers.

It was this practice that led to Nationwide’s closure and liquidation.

WATCH: SA Airways airbus takes off at night

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