Andrew Attieh and Pinsent Masons' competition law expert Mark Thomas commented after the Congressional Portfolio Committee on Trade, Industry and Competition, and held a meeting with various stakeholders in the aviation industry this month to discuss price management and regulation of low-cost industries in the country.
Various regulatory and government departments attended the briefings, including the National Consumer Commission, the Competition Commission, the Ministry of Trade and Industry, the Ministry of Transport, the South African Aviation Authority, and South African Airport Company. The discussion focused on a variety of issues facing consumers in the low-cost aviation industry, including overbooking, overpricing, and lack of competition on low-frequency routes.
Attieh said: “The Parliamentary investigation could lead to changes in how South Africa's domestic low-cost aviation industry is regulated. However, what shape the investigation will take or the reforms it is recommended remains unknown.”
The committee heard from the committee that said that while there was significant competition in the airline market prior to the Covid-19 pandemic, it noticed post-pandemic changes in a market with one dominant airline in the low-cost market. This concentration raises concerns about declining competition and impact on consumers.
In terms of consumer protection, one of the major issues highlighted was the practice of overbooking. The National Consumer Commission noted that it was investigating overbooking allegations after receiving numerous complaints from the public, and encouraged public members to advance their further overbooking experience.
Earlier this year, FlySafair was scrutinized in recognition of intentional overbooking flights, but this was a global industry practice. The admission said he bumped from the flight on a journey home after the celebration period, following multiple complaints on social media.
“This meeting sets a stage of critical discussion about the future of the sector. The committee's low-cost aviation industry scrutiny marks key steps to strengthen consumer protection and fostering competitive markets in a congressional survey that may inform future regulatory actions,” Thomas said.
The Portfolio Commission's survey shows growth trends at the intersection of consumer protection law and competition law. This has been subject to recent legislative changes in both the UK and the European Union.
