A franchise agreement between private airline Airlink and SAA is helping Airlink to build a monopoly, according to competitors.
Airlink is reportedly in the process of taking over a number of routes the state-owned airline dropped earlier this year.
Speaking to the City Press, a competitor said Airlink gets preferential treatment due to the agreement – and other airlines are unable to grow.
Another source told the City Press that the agreement allows Airlink to share SAA’s flight booking platform and the private airline has an unfair advantage which almost blocks the market to new entrants.
According to the report, SAA spokesperson Tlali Tlali said Airlink was the only local airline that had been awarded the International Air Transport Association’s operational safety accreditation and denied claims that SAA had relinquished flight routes to Airlink.
Beneficial arrangement
Airlink CEO Rodger Foster confirmed the company had applied for a number of flight routes and said the arrangement between SAA and Airlink was beneficial to both airlines.
“The Comair franchise relationship with British Airways is very similar to the one between Airlink and SAA,” said Foster.
“Such relationships are in place throughout the world and are available to any other private airline that wants to forge such a commercial relationship with any relevant international strategic partner, on a willing party basis.”
SAA recently reduced its number of operational flight routes across Africa in an effort to improve profitability.
This followed economists raising concerns over SAA’s financial situation, stating that the government’s recent R3-billion SAA bailout could result in a ratings downgrade for the country.
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