South Africa: Competition Commission blocks SA Airlink and Safair merger

On Friday, 23 February, the Competition Commission South Africa announced it has prohibited the proposed merger between SA Airlink and Safair, “as the transaction is likely to result in a substantial prevention of competition.”

Airlink and Safair said on Friday they are “disappointed to learn from the Competition Commission that it has not approved the proposed Airlink acquisition of Safair.”

The commission said that the transaction would be likely to result in a substantial prevention of competition. It said the merger would be likely to remove a competitor to Airlink, and that Safair offered competitive prices. A merger could result in substantial price increases, it said.

Safair operates a passenger and cargo service and has a large share of the humanitarian-relief market in Africa. It has provided specialized aviation services since its inception in 1965. In 2013, it launched the regional low-cost carrier FlySafair in competition with, among others, the 100% South African Airways (SAA)-owned Mango Airlines.

Airlink is the largest independent regional airline in Southern Africa and operates a feeder network linking smaller towns and regional centers in SA in a strategic alliance with SAA. It transports about 1.4-million passengers a year.

The commission said it was concerned also about competition constraints on future routes in which that Safair might choose to operate and that an exchange of sensitive information might compromise SAA. This could enhance and facilitate anticompetitive co-ordinated conduct.

Full Content: Buissnes Day

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