South Africa’s Airlink Defends Pricing Amid Tribunal Probe

South African carrier Airlink has defended itself against allegations of predatory pricing on the Johannesburg–Mthatha route, telling the Competition Tribunal that losses and high re-establishment costs—not anti-competitive behavior—defined its operations between 2012 and 2016.

The case, first referred by the Competition Commission in 2018, stems from complaints by failed start-up Fly Blue Crane, business executive Khwezi Tiya, and the O.R. Tambo District Chamber of Business. They allege that Airlink initially charged high fares, slashed them below cost to drive out Fly Blue Crane, and then raised prices again once its competitor exited in 2017. The commission’s investigation claims Airlink’s practices led consumers to overpay by more than ZAR100 million (USD 5.7 million) over five years.

Airlink, however, maintains that the route was never consistently profitable. The airline cited an operating loss of ZAR12 million outside the disputed period and challenges at Mthatha Airport, including unreliable power, poor runway lighting, and limited fuel storage. Economic expert Anthony Felet testified that global shocks—from the 2008 financial crisis to COVID-19—forced the airline into debt restructuring and shareholder contributions totaling ZAR100 million.

Rebuilding the route after pandemic-related suspensions cost Airlink another ZAR28 million, the airline said, proving its long-term commitment to the market. During the period under review, it earned ZAR104 million in operating profits but argued fare increases of roughly 6% annually reflected market conditions rather than abuse of dominance.

If found guilty, Airlink could face penalties of up to 10% of annual turnover. Hearings are expected to continue for another two weeks.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com