SAA escapes fine in European probe


South African Airways, the subject of a European Commission investigation into price-fixing in the airline cargo market over the past four years, has escaped the hefty fines imposed on 11 of its competitors late last night.

The European Commission yesterday fined 11 air cargo carriers a total of 799.445 million euro for operating a worldwide cartel which affected cargo services within the European economic area, Business Day reported. The airlines were accused of co-ordinating their actions on surcharges for fuel and security without discounts over a six- year period starting in 2000.

However, SAA is still not entirely off the hook as it is still under investigation for price-fixing and collusion in the US, Australia, Switzerland and South Africa, the broadsheet says.

In July, SA’s Competition Commission said SAA and seven foreign airlines could face penalties equivalent to 10% of their local revenue after it referred a case of collusion and price-fixing in the air cargo market to the Competition Tribunal. The airlines face allegations that they fixed the price of fuel surcharges and cargo rates on freight flown into and out of SA between 2000 and 2006. The airlines involved are British Airways, SAA Cargo, Air France Cargo-KLM, Alitalia Cargo, Singapore Airlines, Cargolux International, Martinair Cargo and Lufthansa Cargo, which has applied for leniency.

Oupa Bodibe, advocacy and stakeholder manager at the Competition Commission, said the outcome of the European Union ruling would not have a bearing on its investigation and that the airline had until the end of the month to respond to the tribunal. Despite the pending investigations, the European Commission’s decision must come as a huge relief to SAA’s management, Business Day says. The largest fines were imposed on Air France (182.92 million euro) and KLM ( 127.16 million euro). The other airlines include Air Canada, British Airways, Cathay Pacific, Cargolux, Japan Airlines, LAN Chile, Martinair, Singapore Airlines, SAS and Qantas.

Lufthansa and its subsidiary Swiss received full immunity from fines as it was the first to provide information about the cartel. The commission also dropped charges against a further 11 carriers — of which SAA was one — and a consultancy firm.

SAA spokesman Fani Zulu said the “European Commission was the first competition law agency to initiate an investigation into the airfreight cartel, which led to investigations and fines imposed by competition agencies worldwide … This positive outcome should prompt a reconsideration of investigations and cases in other jurisdictions relating to allegations that SAA was involved in the so-called global airfreight cartel.”