Airfares: SAA under fire
11 March 2010, 12:46
The Democratic Alliance on Thursday demanded to know why SA Airways (SAA) is charging "extortionate" prices during the 2010 Fifa World Cup.
A DA study had revealed that the prices being charged by state-owned SAA, ahead of the World Cup quarter-finals, semi-finals, and final matches, were between two and three times higher than any other airline in the country, party spokesman Greg Krumbock said.
"The study shows that SAA's prices are far off the market equilibrium rate, being charged by commercial airlines in this country.
"The implication is two-fold - firstly, consumers will be driven away from SAA and the state-owned airline will lose revenue during this period. Secondly, they will scare away potential tourists," he said.
"No wonder SAA's senior management failed to appear for their scheduled appearance before the portfolio committee on public enterprises this week to answer questions about their ticket pricing."
The study showed that the cost of flights being charged by SAA the day before major World Cup matches far exceeded the ticket prices of their competitors, hinting that SAA might wait until flights on other airlines were booked up and then use the resulting monopoly to charge extortionate prices.
Of the four airlines, only British Airways maintained a fixed-price throughout.
SAA's prices were shown as massively inflated, Krumbock said.
"The question is thus quite simply: How is it that SAA manages to stay more or less competitive with other airlines before, but not during, the 2010 Fifa World Cup?
"We believe this research speaks volumes about how parastatals operate in the ANC's warped version of the developmental state.
"Whereas state-owned enterprises are supposed to provide quality and affordable services, our research shows that the market is providing flights between two and three times cheaper than the state's airline.
"It is the state that is trying to rip-off consumers, while the market is offering services at respectable rates."
SAA's prices might have been one of the significant factors involved in precipitating the unwelcome decline in anticipated visitors during the tournament, Krumbock said.
New SAA CEO Siza Mzimela needed to explain her failure to appear before Parliament this week, explain the reasons for SAA's massively inflated flight prices, and explain why SAA's booking system was so poor that it resulted in one of its own operational managers being thrown off one of its flights. - Sapa
A DA study had revealed that the prices being charged by state-owned SAA, ahead of the World Cup quarter-finals, semi-finals, and final matches, were between two and three times higher than any other airline in the country, party spokesman Greg Krumbock said.
"The study shows that SAA's prices are far off the market equilibrium rate, being charged by commercial airlines in this country.
"The implication is two-fold - firstly, consumers will be driven away from SAA and the state-owned airline will lose revenue during this period. Secondly, they will scare away potential tourists," he said.
"No wonder SAA's senior management failed to appear for their scheduled appearance before the portfolio committee on public enterprises this week to answer questions about their ticket pricing."
The study showed that the cost of flights being charged by SAA the day before major World Cup matches far exceeded the ticket prices of their competitors, hinting that SAA might wait until flights on other airlines were booked up and then use the resulting monopoly to charge extortionate prices.
Of the four airlines, only British Airways maintained a fixed-price throughout.
SAA's prices were shown as massively inflated, Krumbock said.
"The question is thus quite simply: How is it that SAA manages to stay more or less competitive with other airlines before, but not during, the 2010 Fifa World Cup?
"We believe this research speaks volumes about how parastatals operate in the ANC's warped version of the developmental state.
"Whereas state-owned enterprises are supposed to provide quality and affordable services, our research shows that the market is providing flights between two and three times cheaper than the state's airline.
"It is the state that is trying to rip-off consumers, while the market is offering services at respectable rates."
SAA's prices might have been one of the significant factors involved in precipitating the unwelcome decline in anticipated visitors during the tournament, Krumbock said.
New SAA CEO Siza Mzimela needed to explain her failure to appear before Parliament this week, explain the reasons for SAA's massively inflated flight prices, and explain why SAA's booking system was so poor that it resulted in one of its own operational managers being thrown off one of its flights. - Sapa
Cape Town
