SAA has hit back at Comair – following Comair’s High Court legal challenge, which was dismissed earlier this month – lodging a claim with the Competition Commission questioning the payment of incentives by Comair to travel agents.

In 2005, the Competition Commission fined SAA for an abuse of dominance centred on its use of loyalty override agreements with travel agents. According to SAA, Comair’s current incentivisation scheme is similar to that of SAA’s in 2005.

Erik Venter, CEO of Comair, argues, however, that SAA still has approximately 70% of domestic sales through BSP, making it impossible for Comair to be deemed dominant in this market segment. “Furthermore, the conditions imposed by the Commission on SAA were specific to SAA.”

This move by SAA comes as Comair is consulting legal counsel to decide whether it will appeal the High Court ruling that dismissed the carrier’s legal challenge of the R5bn government guarantee granted to SAA.

Judge Hans Fabricius dismissed Comair’s challenge saying the ministers acted legally in their decision to grant government guarantees for SAA. He said the ministers needed to take into account the consequences for the economy if SAA could no longer function. 

The consequences of the judgment should be of great concern to taxpayers, Venter says. “The ruling confirmed that the Minister of Finance has no obligation to record the rationale for his decisions and that government does not have to take its own policies into consideration.” He adds that, in a nutshell, SAA can receive unlimited guarantees without any expectation of the airline ever repaying the resulting loans.