Competition Commission warns airlines against price gouging

The Competition Commission has issued a stern warning to airlines against price gouging in the wake of the Comair scandal which has left thousands of passengers stranded.

“Where the Commission finds that airlines have actively removed seats from low fare buckets and allocated them to higher-priced fare buckets or introduced new much higher fare buckets on popular routes, then the Commission may consider this an act of price gouging designed to deliberately exploit the current situation,” it warned.

It warned airlines of swift and decisive action if there’s evidence of price gouging.

The Commission said it plans to engage with airlines over the next few days to establish what plans they have in place to address the current situation and any complaints from travellers about prices in the market. 

ALSO READ: Anger over Comair grounding as thousands stranded

Comair suspension

Last Saturday 12 March 2002, the South African Civil Aviation Authority announced that it had suspended Comairs Air Operator Certificate with immediate effect, which subsequently affected passengers booked to travel with its subsidiaries Kulula.com and British Airways.

“This suspension meant that significant airline seat capacity had been removed from the market and that would undoubtedly result in travellers having scramble up the remaining tickets in higher fare buckets,” said the Commission in a statement.

Within a day of the suspension passengers scrambling to make alternative arrangements reported large increases in price for seats on the remaining airlines, with some even quoting R5000 for a single flight ticket from Johannesburg to Cape Town.

“Whilst the Commission understands that the removal of airlines does certainly have an impact on the airfares, the situation that stranded passengers find themselves in should not be unduly exploited by other airlines,” it said.

The Commission encourages all airlines to put more capacity into the market where possible until the Comair situation has been resolved in order to assist stranded passengers at more moderate prices.

SAA and Fly SA Fair have denied inflating prices.

“SAA has not increased fares because of Comair’s temporary grounding. The airline has deployed bigger aircraft on some Durban and Cape Town flights and will continue to do so until the current situation stabilises,” said the airline in a statement.

“FlySafair, like other airlines around the world, uses a system called ‘demand-based pricing’. As the seats start to sell out, they become incrementally more expensive,” said the airline in a tweet.

NOW READ: FlySafair grilled for price gouging in the wake of Comair groundin