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World Cup fare cartel inquiry engulfs South African carriers

South Africa's competition authority has opened an investigation into possible collusion over fare pricing involving several of the country's main airlines.

It follows a request by South African Airways to offer co-operation with the probe in exchange for leniency.

The Competition Commission is to inquire as to whether airlines collectively agreed to raise fares during the World Cup football tournament which is scheduled to begin in June.

Among the other carriers caught up in the investigation are SA Express, British Airways franchise partner Comair, Airlink, 1Time and Mango.

Concerns over a possible pricing cartel emerged in November 2009 and South African Airways put its co-operation offer to the Commission last month.

"In its application South African Airways gave the Commission e-mail correspondence between the airlines in which there are indications that the airlines might adjust air fares ahead of the World Cup," says the regulator.

It says that the e-mail evidence discusses pricing options for dealing with the uncertainty over peak-demand services, as well as the possibility that air fares will need to be raised to cover additional costs.

Regional carrier Airlink says it received an e-mail from a Comair worker, which was also sent to a transport ministry working group dealing with air carriage arrangements for the tournament. Comair could not immediately be reached to comment.

Airlink insists it "did not respond" to the message, "did not seek to involve itself" in the contents and has "not participated" in any discussions. Chief executive Rodger Foster says he is "dismayed" at the inquiry and says the airline will set its own fares "without any form of co-ordination with our competitors".

SA Express similarly states that it is "not party to any collusion" over fares for the World Cup. It says it has only been involved in the transport ministry discussions to ensure adequate fleet planning.

Competition commissioner Shan Ramburuth says: "It ispossible that some firms might want to exploit the situation by engaging in anti-competitive conduct."

None of the carriers identified has been formally accused of anti-competitive behaviour.

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