Fly Modern Ark founder, Theunis Crous, says the company has lodged a complaint with the Competition Commission to intervene in a “monopoly” that, he says, has been created by a long-standing franchise agreement between SA Airlink and SAA.
Crous says the airline conducted a marker feasibility study, which found the franchise agreement presented a significant barrier to entry for smaller airlines. The agreement, which came at a price of R14,5m for SA Airlink, gives Airlink unlimited use of SAA’s intellectual property. This includes access to the SAA booking system, which allows Airlink flights to be hosted on the SAA code.
“The access to their booking system is priceless and makes it impossible for any new entrant who wants to operate on the same routes as SA Airlink, to be successful,” says Crous.
Crous has delayed the launch of domestic routes to March next year in order to “create a level playing field” in the domestic market. The airline had planned to launch flights in November, operating on the same routes that SA Express and SA Airlink currently offer.
However, Rodger Foster, CEO and MD of SA Airlink, says since its formalisation over 20 years ago, the SAA-Airlink franchise agreement has been submitted to the Competition Commission several times for scrutiny. “On each occasion, it was found to be fully compliant.”
SAA Spokesperson, Tlali Tlali, says SAA’s view is that the agreement is not anti-competitive. “Agreements of this nature are in pursuit of commercial interests among airlines that conclude them and are invariably supported by each airline’s business model. This is a choice that individual carriers make.”
