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SAA defends airfares

Chikaonda: SAA not operate in monopolistic market
Chikaonda: SAA not operate in monopolistic market

South African Airways (SAA) has defended its air fares, arguing that the airline’s pricing decisions take into account production costs, among other things.

This follows a cry from travellers who recently, argued that the airline is taking advantage of the market as it is now a single player plying the Malawi-Johannesburg route.

Economic Empowerment Action Group (EEAG) president Lewis Chiwalo in a recent interview observed that it is mostly businesspeople that travel on the Malawi-Johannesburg route and that the high fares would therefore add up to the cost of doing business in the country and impact greatly on the economic growth.

Said Chiwalo: “SAA is ripping us off; they are charging exorbitant fares that we can’t afford. The problem is that with businesspeople travelling on this route, such costs will be transferred to either the products they manufacture or whatever it is they do. They will build that cost into their pricing structure and adjust their prices. At the end of the day, it will be the consumers of the products that will suffer”.

Chiwalo pinned his hopes on government speeding up the partnership between Malawi an Airlines and Ethiopian Airlines, arguing that this would probably bring about the much needed competition in the aviation industry and result in the exorbitant fares going down.

However, in an e-mail last week, SAA country manager, James Chikaonda argued that the airline’s pricing decision takes into consideration a number of things, including operational costs.

“Each pricing decision is driven by various factors, which include but are not limited to: cost of operations; landing and overflying costs; airport service fees; statutory and regulatory disbursements to the host governments; and airport service use fees. All these variable and direct operating costs are taken into consideration and lead to the final price levied in the markets,” said Chikaonda.

He indicated that SAA is not in a monopolistic situation, arguing that the reality is that the travelling public have options through other airlines that serve the Malawian market even though those airlines do not operate non-stop to Johannesburg.

SAA has been serving the Malawi travelling public for more than 55 years. Through various changes to the Bilateral Air Service Agreement between South Africa and Malawi, the airline sought to increase the frequencies and capacity offered in this market.

As this stands, Chikaonda said, they have been struggling to obtain the increases deemed necessary to satisfy the demand that exists and is anticipated on the Malawi to South Africa route.

“We are engaging Malawian and South African authorities with the intention of obtaining additional frequencies and capacity to serve this market. The process is on- going,” he said.

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2 Comments

  1. This story is not complete as it lacks the most critical of all information: how much is SAA charging? For example, whats the fare for the Blantyre to Joburg? Is it K1,000,000.00, K500,000.00, K300,000.00? G

  2. This is a classic example of price fixing. Can someone take these thugs to court? How can one pay the same amount to those travelling to Europe? Its 2hrs journey yet it cost more than 12hrs one. There is no justification for such thugery. Thats why am now using buses.

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