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Says ‘priority investigation’ into FlySafair is taking longer than expected.
The NCC says the information it has received ‘points to’ FlySafair, while the airline notes that overbooking is ‘common practice’ in the aviation industry. Picture: Supplied
The National Consumer Commission (NCC) has emphasised that overbooking and overselling airline flight tickets is illegal in terms of the Consumer Protection Act (CPA).
Hardin Ratshisusu, acting commissioner of the NCC and deputy commissioner of the Competition Commission, told a joint meeting of parliament’s portfolio committees on trade, industry and competition and of transport on Tuesday that there are specific provisions in the CPA that deal with overbooking and overselling.The focus of the meeting was on competition issues in the budget airline industry and follows the NCC on 8 January initiating an investigation into the conduct of overbooking and overselling by local and regional airline FlySafair to assess its compliance with the provisions of the CPA.
“I just need to emphasise that the CPA prohibits a supplier from accepting payment for goods or services that do not exist,” said Ratshisusu.
“So suppliers must not offer services or products that are not there to consumers because the CPA will kick in.”
He added that given the nature of the allegations against FlySafair, this is a priority investigation by the NCC – and urged consumers who are affected by this practice to come forward and provide information that could assist the investigation.
Ratshisusu said the FlySafair investigation is still underway and information provided by consumers will be considered as the NCC looks into this matter.
Ratshisusu said the NCC notified FlySafair of the investigation on 8 January, the same date as the initiation of the investigation, and received an initial response from FlySafair on 30 January with a lot of supporting information and data.
ALSO READ: National Consumer Commission investigating FlySafair for overbooking
However, Ratshisusu said further probing of the submissions by FlySafair is required.
He said the initial plan was to conclude the investigation in the first quarter of the NCC’s 2025/26 financial year, but given the volume of information to analyse, the investigation is now planned to be completed in the second quarter of 2025/26.
He added that in respect to overbooking and overselling, the CPA has specific provisions that deal with this issue.
Ratshisusu said it is prohibited in terms of Section 19 (2) for suppliers broadly to overbook and this particular provision entitles a consumer to receive the services they paid for as agreed with the supplier.
He said Section 22 gives the consumers the right to information in plain and understandable language, while in terms of Section 41, it is prohibited for suppliers to market goods or services falsely or in a misleading or deceptive manner.
Ratshisusu said Section 47 (2) is specific to overbooking and overselling and it is quite clear that overbooking and overselling is prohibited, except under limited circumstances.
He said Section 48 prohibits unfair and unreasonable contract terms, and Section 49 (3) obligates suppliers to draw the attention of consumers to certain terms and conditions that limit the supplier’s liability.
Ratshisusu said these are the provisions of the CPA it has used to initiate the investigation against FlySafair.
ALSO READ: FlySafair says it will engage constructively with NCC investigation into overbooking
He said the investigation was initiated following an incident where a consumer booked a flight and paid for it but on arrival at the airport was informed there were no seats available for them.
Ratshisusu said other consumers raised similar concerns, citing the impact of a flight booking not being honoured by an airline, including missing appointments, the disruption to their travel plans and the need for adequate compensation because of overbooking.
He referred to comments that the NCC should be extending this investigation to other airlines but the information the commission has to date “points to this specific airline [FlySafair]”.
Dr Chris Hunsinger, a member of the portfolio committee on transport, said he was also affected by FlySafair overbooking and was “left standing in Joburg after flying up the same morning”.
“I really find the submitted reason that it’s common practice and of benefit to customers really surprising and totally unacceptable. It just cannot be,” he said.
ALSO READ: Airlink distances itself from flight overbooking practices following FlySafair tensions
Ratshisusu added that the NCC has picked up in the media some of the responses by FlySafair to the investigation and it stating that overbooking is a common practice in the industry in order to keep prices affordable, thereby implying that overbooking is done to benefit consumers.
He said some FlySafair comments also indicated that every ticket sold is not a guarantee that a passenger will show up and asserted that there is no overbooking.
“If there is no overbooking, airlines would have more empty seats and consumers would need to pay a higher fare to cover the costs of those empty seats.
“These statements were not well received by consumers and this is something that is the subject of this probe by the NCC,” he said.
The meeting of the joint committees earlier received presentations from the Competition Commission, the Department of Transport, the Airports Company of South Africa (Acsa), the SA Air Traffic Navigation Services (ATNS) and the SA Civil Aviation Authority focused on competition in the airline sector and charges and tariffs airlines are charged by these entities that could have an impact on the price of airline tickets to consumers.
Acsa CEO Mpumi Mpofu said the aviation sector has changed to a new dispensation post Covid-19 and airport charges generally contribute less than 8% to the direct costs of airlines and that Acsa applies uniform charges to low-cost and full-service carriers.
“The differentiation only applies where it’s got to do with different segments, whether you are domestic, regional or international. That is how we differentiate,” she said.
ALSO READ: FlySafair’s future up in the air: Bid to keep airline flying
Competition Commission Commissioner Doris Tshepe said pre-Covid-19, there was generally healthy competition among low-cost carriers in the high-density routes, with the three major low-cost carriers at the time – Kulula, Mango and Safair – each having a sizeable market share of about 18% and similar efficiencies and costs.
Tshepe said there was competition among full-service carriers between SAA and Comair on high-density national routes and regional routes but more limited competition on low-density national and regional routes, which are mostly operated by SA Airlink, CemAir and SA Express.
However, Tshepe said there was a lot of restructuring of the entire airline market as a result of Covid-19, resulting in far less effective competition.
Tshepe said FlySafair holds a pretty dominant position in the low-cost carrier market, with its only competition coming from Lift.
She said from a full-service carrier point of view and smaller regional routes, Airlink, SAA, and CemAir operate, but on the smaller routes there are often only Airlink and CemAir.
This article was republished from Moneyweb. Read the original here.
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