A court has ordered national carrier South African Airways (SAA) to pay R104.6m plus interest to Nationwide Airlines for anticompetitive conduct.

It is another financial blow for the cash-strapped airline and it might face a further court bill as a similar claim by Kulula’s owner‚ Comair‚ for R1bn is pending in the high court. The claim is the first damages suit to be brought based on a finding of anticompetitive conduct by the Competition Tribunal.

Nationwide‚ now in liquidation‚ brought the action after the tribunal found in 2010 that SAA had abused its dominant position in the market to divert customers from competitors.

Nationwide’s claim was for R171.5m in damages‚ plus interest calculated from 2010 — a total of about R325m.

In granting the claim‚ High Court in Johannesburg Judge Caroline Nicholls said she agreed with the Competition Tribunal and the Competition Appeal Court that SAA’s abuse of its dominant position — from 2001 to 2005 — was “the major cause of the decrease in volume of Nationwide’s passengers“.

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 — a “prohibited practice” under the Competition Act. “Those are findings which cannot be faulted but‚ in any event‚ to which this court is bound‚” said the judge.

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