Lufthansa to pay fine for price fixing

1st Jun 2006

Lufthansa will pay an R8.5 million penalty for colluding with SA Airways (SAA) to fix the price of air tickets to Frankfurt, the Competition Commission told the South African Press Association.
“The Commission’s investigation found that from 1999 until the Commission commenced its investigation during 2002, the airlines had fixed the selling price of air tickets on their flights between Cape Town/Johannesburg and Frankfurt through meetings and communications where price changes and the harmonisation of fares were discussed,” the commission said.

“In terms of the agreement Lufthansa has agreed to pay an administrative penalty of R8.5 million and to ensure that its business complies with the Competition Act.”

Lufthansa has signed a consent agreement with the Commission on the matter and it has been referred to the Tribunal for confirmation.

Last week SAA signed a consent agreement on slightly similar terms for a R55 million penalty to be paid by next May.

The Commission said that SAA had induced suppliers not to deal with competitors.


It agreed to pay R20 million for abusing its dominance regarding override commission and trust payment agreements between SAA and travel agencies.

SAA and SA Express would jointly pay an additional administrative penalty of R20 million for the agreed simultaneous implementation of an identical fuel surcharge levy amounting to the price fixing of both domestic and international flights.

The airline also agreed to pay R15-million for entering into agreements with travel agents on terms which would induce them not to deal with competing airlines.

SAA will also implement a compliance programme to ensure its employees and directors are informed of, and comply with, their obligations under the competition law and provisions of the Act.



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