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Aviation History
1993
1993 - 0065.PDF
AIR TRANSPORT SAA ordered to increase fares BY LINDEN B1RNS IN JOHANNESBURG South African Airways (SAA) has been found guilty of acting in an "anti-competitive" manner and has been ordered by the country's Competitions Board to increase fares and cut domes tic flights to below 1991 levels. The order follows an investi gation into SAA's business prac tices by the Board, in association with London-headquartered con sultancy Price Waterhouse. The probe was launched after SAA's privately owned domestic rival, Flitestar, made several complaints about the state- owned flag-carrier. In a strongly worded state ment, Competition Board chair man Dr Pierre Brooks says that the failure to meet the Govern ment's objective — that SAA operate autonomously on a com mercial basis — has serious im plications for Flitestar and the third domestic airline, Comair. In 1992, Flitestar managing director Jan Blake claimed that SAA was slashing fares below cost, forcing Flitestar and Co mair to follow suit or lose pas sengers. He contended that SAA was able to cover its domestic losses through cross-subsidisa tion of its domestic operation from its international division. Among the Government SAA gets its wings clipped in domestic dispute cornerstones to domestic deregulation in 1992 were that SAA cease cross-subsidisation and that it compete against Flitestar, Comair and any other entrants on an equal footing. Brooks says that he is unable to state categorically that cross- subsidisation has taken place, but hopes that the new account ing methods adopted by SAA will make for more efficient monitoring of how the airline manages its finances. "The fact that SAA's domestic air services are currently being run at a substantial loss has adversely affected the profitabil ity and, indeed, threatens the viability of both Flitestar and Comair," he adds. The Board finds, however, that not all of Flitestar's griev ances can be attributed to acts and omissions by SAA. It says that some of the new airline's problems have arisen from bad business decisions. The Board recommends that: • SAA should restore fares on domestic trunk routes to January 1991 levels in real terms and maintain such levels with six- monthly adjustments until its domestic operation becomes profitable; • SAA should ensure that its discount fares against which Co mair competes are in real terms at the same levels as those in place when Comair entered its agreement with SAA to wet-lease a Boeing 737-100; • SAA should cut flights on domestic trunk routes by 1 March, 1993, to an annual seat capacity level 30% lower than at May 1991. The Board accepts that, if implemented, its recommenda tions would lead to a fares in crease, but believes this to be unavoidable if competition is to be ensured. • Indian pilots return after Tu-154 crashes The majority of Indian Air lines' executive pilots have returned to work following the crash of a Tupolev Tu-154 and subsequent grounding of six other Tu-154s. The Tupolevs were wet-leased from Uzbekistan Airlines (UAL) in a bid to break a month-long strike by the In dian Airlines pilots. All 167 passengers and crew escaped when the Tu-154 crashed at New Delhi Airport in the early hours of 9 January. The aircraft was returning from Hyderabad and the crew made an approach to the fog-bound airport after being told by air traffic control not to land. The crew continued the land ing, because of what air traffic control calls "an error over a standard international code of communications". The aircraft left the runway, suffering heavy wing and undercarriage damage, before overturning and catch ing fire. Ghani Rafikov, UAL's director general, denies reports that the crash was caused by the pilot's poor knowledge of English. Both crew are highly experienced, he says. The crash is the second inci dent involving UAL Tu-154s in a matter of days. On the 6 January the crew of a UAL- leased aircraft made a wrong turning on approach to Madras Airport and tried to land at a military air base, where a train ing aircraft was taking off. The military air traffic control in tervened and redirected the air craft back to Madras. Indian Airlines' 44 executive pilots had been refusing to oper ate aircraft in sympathy with 400 striking line crews in a dispute over wages. The pilots' partial return to work enables Indian Airlines to re-establish some of its national network capacity by flying larger Airbus A300s in preference to the usual A320s. • Atlantic Coast to get Jetstream 41s Atlantic Coast Airlines has contracted formally for 17 British Aerospace Jetstream 41 aircraft. The airline previously had an option on 15 aircraft. The United Express carrier now expects to take delivery of the first aircraft in April, mak ing it the North American launch operator, since Ameri can Eagle has yet to confirm its 50 options. Nick Godwin, vice-president of marketing services for BAe's Jetstream Aircraft subsidiary, says that the aircraft has been exempted until 31 December from the controversial US Fed eral Aviation Administration regulations on new head- impact-survival criteria for pas sengers in seats facing bulk heads. BAe had already secured a temporary waiver from the European Joint Airworthiness Authority (JAA). Godwin explains that BAe has met the requirement for the front-row seats on the right-hand side (which face a floor-to-ceiling bulkhead) by padding the bulkhead. The equivalent left-hand row, how ever, faces only a half-height bulkhead with a handrail. Atlantic Coast is requesting a change to a full-height bulk head and Godwin says that the change, together with addi tional padding, will probably be made standard. He says that the only remain ing certification issues relate to differences in fuel schedules between the FAA and JAA requirements, but that those are now paperwork matters. The contract signing, worth more than $100 million, comes just a week after Atlantic Coast reached agreement with United Airlines to buy the Washington Dulles operations of Air Wisconsin, together with its 12 de Havilland Dash 8 aircraft. The carrier, one of the most successful of the US regionals, says that it will also buy six used Jetstream Super 31s to add to the 22 of the type that it acquired when it bought WestAir's East Coast division in 1992. D FLIGHT INTERNATIONAL 20 - 26 January, 1993 11
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