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Nationwide's liquidators to claim damages from SAA
March 9, 2009
 By Ann Crotty
The liquidators of Nationwide Airlines hoped current proceedings before the Competition Tribunal would enable them to claim damages against SAA for an abuse of power by the national airline, Vernon Bricknell, the former chief executive of the airline, said on Friday.
Bricknell was commenting after giving evidence in the latest battle in a long-running war against SAA’s alleged anti-competitive conduct. The dispute, relating to an SAA incentive scheme for travel agents, has been fought before the competition authorities for almost a
decade. SAA abandoned the scheme from January 2005.
The competition authorities have already ruled against
SAA’s scheme. In a case that was brought by Nationwide in 2001 and related to the period 1999 to 2001, the tribunal ruled in 2006 that SAA's scheme was
a prohibited practice and contravened the Competition Act.
The tribunal issued a declaratory order that enabled
Nationwide to sue SAA for damages. That legal action, heard in the Pretoria High Court in 2007, was settled.
Comair brought a similar complaint to the Competition
Commission in 2004 relating to the period from 2001 to 2004. Comair alleged that SAA's scheme, which involved generous agreements that secured the loyalty of travel agents to the exclusion of SAA's rivals, was anti-competitive.
In October 2004 the commission referred this complaint to the tribunal. Before the tribunal could rule on the complaint SAA agreed to a settlement with the commission by paying an administrative fine of
R15 million and refraining from future incentive agreements with travel agents.
However, because SAA did not admit liability in that settlement, Comair could not secure a declaratory order from the tribunal that would enable it to pursue a claim of damages in the high court.
Comair is trying to get a declaratory order against SAA
in the current case. The liquidators of Nationwide have
joined this action.
SAA is arguing that the market for airline tickets changed fundamentally after 2001 and that it is impossible to show that other airlines suffered from foreclosure as a result of its incentive scheme.
Bricknell countered that, although kulula.com took market share after 2001, the appropriate definition of market in this case was the travel agents' market.
"Almost immediately after SAA announced that it
was terminating its incentive scheme, our share of the travel agents' market increased by 60 percent," said Bricknell.
The case is scheduled to continue until March 20.
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