South Africa Probes SAA, Comair on World Cup Prices

South Africa’s Competition Commission said it is investigating airlines for “allegedly colluding” over ticket costs and pricing strategies during this year’s Soccer World Cup tournament in the country.

The companies include Johannesburg-based Comair Ltd., which is part owned by British Airways Plc, state-owned South African Airways Ltd., 1time Holdings Ltd., SA Airlink, and SA Express, the Pretoria-based Commission said in an e-mailed statement today. 1time, Comair, SA Airlink and SA Express denied colluding.

South Africa hopes the World Cup, the world’s most-watched sporting event, will attract as many as 450,000 visitors in June and July, mainly from Europe. South Africa, the continent’s most industrialized economy, has expanded airports in cities that will host World Cup matches.

“Some firms might want to exploit the situation by engaging in anti-competitive conduct,” Competition Commissioner Shan Ramburuth said in the statement. “The Commission is obliged to investigate all legitimate complaints in such instances.”

Johannesburg’s O.R. Tambo airport is southern Africa’s biggest transport hub, with 17 million passengers passing through every year, according to its Web site. South Africa’s target for visitors may be impossible to reach because a lack of affordable flights from Europe, said Jerome Valcke, secretary- general of soccer’s ruling body, FIFA.

“It’s impossible to find a seat,” he told reporters in Johannesburg yesterday. “If you want to do it, it costs a fortune.”

SAA, whose low-cost unit Mango is also being investigated, submitted e-mail correspondence between airlines as evidence. The carrier is cooperating with the commission in exchange for “leniency from prosecution,” the Commission said.

SAA spokeswoman Sarah Uys said she couldn’t immediately comment when called.

SA Airlink said it received but didn’t respond to an e-mail “by a Comair employee raising the issue of coordinating pricing strategies ahead of the World Cup.”

“SA Airlink did not seek to involve itself in the collusive conduct unilaterally suggested by another airline,” the company said in an e-mailed response to questions.

Comair CEO Gidon Novick, in a phone interview, said his company hasn’t colluded over ticket prices. He declined to comment on SA Airlink’s allegations without having seen what they’re based on.

“There has been no discussion of pricing, we set our own pricing, pricing is set in the context of the market,” Novick said. “Airlines watch what other airlines are doing, but we certainly don’t collude.”

Deputy Competition Commissioner Thembinkosi Bonakele said today that a company, which he declined to name, had submitted a proposal to fix prices.

“There is an issue about whether other airlines actually followed that proposal or they didn’t,” Bonakele said in an interview on Johannesburg’s 702 Talk Radio. “The proposal was very clear about the strategy that needed to be followed around the World Cup period.”

Itime Chief Executive Officer Rodney James denied there had been any collusion or discussions with SAA.

“We do not communicate with SAA at all, not by e-mail or any means,” James said in a phone interview. “We are fierce competitors, we certainly don’t talk to them about pricing issues.”

SA Express “is not party to any collusion with other airlines pertaining to pricing strategies during the 2010 World Cup tournament,” Dileseng Koetle, a company spokeswoman, said in an e-mailed response to questions.

Comair closed unchanged at 2.8 rand in Johannesburg, and 1time was unchanged at 1.15 rand.

Source: Bloomberg (http://www.bloomberg.com/apps/news?pid=20601116&sid=adC8Et0Lo7AI)