The Competition Commission of South Africa has granted an exemption to South African Airways (SAA) and Air Mauritius Limited to form a joint venture on the Johannesburg (JHB) and Mauritius (MRU) route and other related routes.
Head of Communications of The Competition Commission of South Africa Sipho Ngwema said the exemption allows the joint venture collaboration on the network, scheduling, revenue management and distribution across both carriers, thereby enhancing their existing bilateral offering.
“In terms of section 10 of the Competition Act, an exemption may be granted if an agreement or practice constitutes a prohibited practice in terms of Chapter 2 of the Act and is found to contribute to either of the following objectives, namely, maintenance or promotion of exports, promotion of the competitiveness of small businesses or firms controlled or owned by historically disadvantaged persons, change in the productive capacity to stop decline in an industry, or economic stability in an industry designated by the Minister,” said Ngwema.
He said the two airlines will align their economic incentives by pooling the revenue and costs associated with the provision of commercial passenger and cargo services on the trunk route between Mauritius and Johannesburg, and other destinations.
“These airlines will synchronise passenger and cargo capacity, expand their joint networks, access new markets (which may not have been economically feasible in the past) and deliver consumer benefits and create efficiencies that would not be possible without the proposed joint venture arrangement.
“The exemption has been granted as it achieves the objectives set out in section 10 (3)(b) of the Competition Act, primarily as the cooperation between the two airlines will promote exports from South Africa,” he said.
Ngwema said the two airlines will compete more effectively in the global market by using the JNB-MRU trunk route as the platform. He said the joint venture will equally benefit the South African economy as it will lead to increased foreign currency earnings.
The exemption has been granted for a period of five years.
Meanwhile, SAA Acting CEO, Zuks Ramasia, said in a statement yesterday that the airline is on the road to operational recovery.
“We thank SAA employees who are back at work and those employees who have not joined the industrial action. They continue to carry our flag around the world. We also thank our loyal customers for supporting us in this difficult time”, said Ramasia.