The Gauteng High Court (Johannesburg) has ordered SAA to pay more than R104m plus interest to liquidated airline Nationwide for damages caused by SAA’s abuse of market dominance from 2001 to 2006. This, notes a Moneyweb report, is only the second claim of its kind in SA competition law and the first time a damages claim based on a finding by the Competition Tribunal has been litigated.

It sets a precedent for a claim by Comair against SAA for the same conduct, said partner at law firm Bowman Gilfillan, Lucinda Verster, who represented Nationwide and its liquidators. The Comair claim amounts to R870m plus interest and could total around R1.5bn. Closing arguments in this case will be heard from 22 August.

As was the case in the Nationwide claim, the Competition Tribunal has already ruled in Comair’s favour on the merits and only the extent of the damages remains to be determined, Verster said. She noted SAA’s unlawful conduct entailed incentives offered to travel agents between 2001 and 2006, which resulted in them selling SAA flight tickets, rather than that of Nationwide and Comair.

Full Moneyweb report

Judge Caroline Nicholls said she agreed with the Competition Tribunal and the Competition Appeal Court that SAA’s abuse of its dominant position was ‘the major cause of the decrease in volume of Nationwide’s passengers’, notes a Business Day report. SAA had argued that Nationwide’s loss of profits was the result of public perceptions of an ageing and unsafe fleet.

Nicholls said the competition authorities acknowledged the shortcomings in Nationwide’s safety record, but had still found that commission agreements between SAA and travel agents diverted customers away from competitors. ‘Those are findings which cannot be faulted but, in any event, to which this court is bound,’ said the judge.

A major part of Nicholls’s judgment focused on how to quantify the amount of damages to be paid – an exercise with ‘numerous variables to be taken into consideration’, she said. Although the Competition Act says interest on damages claims should be calculated from the date the tribunal issues a certificate of anticompetitive conduct, Nicholls ordered interest payable from the date of judgment. If this were to be found to be an error, it would mean a significantly larger bill for SAA, notes the report.

Full Business Day report (subscription needed)