Competition Commission best placed to get to the bottom of SAA-Mango collusion

17 June 2016

The DA notes the about-turn on the initial statement from SAA confirming that is was subsidising Mango appears to be an attempt to save face in order to evade the heavy penalties that come with violating the Competition Act, by colluding in order to outprice competitor airlines.

The DA has already referred this matter to the Competition Commission which is best placed to get to the bottom of what seems like grand collusion between SAA and Mango. 

Specifically, it is crucial that the Competition Commission investigate all evidence on all aircraft lease contracts between SAA and Mango and get to the bottom of how Mango has been able to offer flights at rates lower than all other airlines to a point where it is uncompetitive. 

Business Day today revealed Mango is a 100% owned subsidiary of SAA. It cannot be ignored that there is a mutual beneficial business relationship at play here and as such the Competition Commission cannot rule out collusion in its report.

The DA has requested that the Competition Commission investigate this matter as stipulated in the preamble of the Competition Act of 1998: 

The Commission is mandated to “investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers in order to achieve equity and efficiency in the South African economy. Its purpose is to promote and maintain competition in South Africa in order to:

- Promote the efficiency, adaptability and development of the economy; Provide consumers with competitive prices and product choices; Promote employment and advance the social and economic welfare of South Africans.” 

We cannot ignore the fact that SAA has been riddled by scandal after scandal, even worse is the fact that SAA is operating at a significant loss which is ultimately a burden to the taxpayer.

The DA is committed to seeing a profitable SAA. We will be tracking the progress on the Competition Commission investigation very closely and we will be calling upon corrective action if deemed necessary by any findings of the report to be tabled in Parliament upon its completion.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 17 June 2016