The Competition Commission (CC) says major airlines have committed to keeping flight ticket prices the same and will not “exploit” the situation following the grounding of Comair flights.
On Wednesday, Comair, which runs Kulula.com and British Airways flights, grounded its fleet, saying that it could no longer afford to fly. The airline is in business rescue.
Commission spokesperson Siyabulela Makunga said Comair's decision has reduced competition and caused a reduction in capacity in domestic air travel.
It was in this light that the commission met the leaders of major airlines Lyft, FlySafair, Airlink and SAA on Wednesday to try understand how capacity could be brought to the market to mitigate the effect of Comair’s decision.
“The commission has noted concerns about the effect of Comair’s decision on air ticket prices and met up with major airlines in order to mitigate price inflations,” said Makunga.
“Specifically, the commission sought to prevent any possible price gouging emanating from the supply shock.
“The commission was encouraged by the positive response of all the airlines in this respect as they acknowledged the need to bring in more capacity in the market and committed not to change their pricing methodologies to exploit the situation.”
Makunga said all parties further acknowledged the challenges posed by the rising fuel prices, which would further put pressure on the cost of air travel.
He said the commission would monitor the situation.
The National Union of Metalworkers of SA (Numsa) said it met the management team of Comair, including CEO Glenn Orsmond, to discuss the fate of the airline.
The union, which represents 700 Comair workers, said it was shocked and surprised by the latest developments and the decision to suspend operations.
“We asked whether employees would be paid their salaries during the period of the suspension. Unfortunately management would not confirm ‘yes’ or ‘no’ in response to that question...” said Numsa's general secretary Irvin Jim.
“It is unfortunate that management chose to engage workers on such important issues without ensuring the BRPs (business rescue practitioners) are also present so that we get all the answers.
“As Numsa we have repeatedly called for the immediate resignation of Glenn Orsmond...
“The grounding and suspension of the airline has left thousands of passengers deeply inconvenienced and management handled the situation very poorly. It is clear that the future of the airline remains very uncertain and we remain doubtful that Orsmond can assist us to find a long lasting resolution.
“We also have questions about the role of the BRPs, which have been in charge for almost two years. They were paid exorbitantly and were seemingly unable to foresee this financial hurdle,” Jim said.
He said they would continue calling for the immediate end of the business rescue process, “which is only rescuing the practitioners' personal bank balances by making them richer at our expense”.
“Our members have had enough. They are understandably angry. We will demonstrate until Glen Orsmond marches out of the buildings permanently.
“This airline can be saved but as long as Orsmond and the BRPs are at the helm, it will continue to nosedive,” Jim said.
He said the union would picket outside Comair offices on Friday. .
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