Costs Mount for South African Airways’ Breach of Competition Law

  • State-airline must pay Nationwide for anti-competitive acts
  • Ruling is boost for Comair’s $65 million compensation claim

South African Airways is facing growing compensation claims for past anti-competitive practices, adding further financial pressure on the airline, which is already dependent on the government for its survival.

SAA was ordered to pay Nationwide Airlines 104.6 million rand ($7.8 million) plus interest in compensation for anti-competitive behavior that drove the company out of business, the South Gauteng High Court ruled Aug. 8. The court will hear the final arguments of Comair Ltd.’s 870 million-rand claim later this month.

South Africa’s Competition Tribunal found that SAA had abused its market-leading position in the early to mid-2000s, leading to lower profits at rival airlines such as Comair and Nationwide, which was liquidated in 2008.

Judge Caroline Nicholls “found that she was bound by the Competition Tribunal’s findings,” said Lucinda Verster, a lawyer at Bowman Gilfillan working for Nationwide’s liquidators. “As guilt had been established, it was just about quantum.”

Nicholls ruled that SAA’s abuse restricted Nationwide’s access to about 75 percent of the market. SAA spokesman Tlali Tlali didn’t immediately respond to a request for comment.

Comair spokesman Stephen Forbes declined to comment beyond confirming the details of the company’s case.

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