Kamogelo Olaitan
Comair’s announcement of plans to liquidate the company on Thursday saw an immediate spike in domestic ticket prices as a result of reduced supply.
Local aviation lost 40% of domestic airline seats when Comair, which operated Kulula and British Airways, closed down.
Comair was grounded on 1 June after its business rescue practitioner failed to raise the necessary funding to continue with operations.
This comes at a time when airlines are struggling with high fuel prices due to Russia’s invasion of Ukraine in February.
FlySafair’s chief marketing officer Kirby Gordon told Moneyweb that the airline has seen an increase in flight prices since the news of Comair becoming public.
“We are price takers, so pricing is always as a result of supply and demand forces in the market and when one [is] approached with a situation like we are at the moment where supply is being constrained relative to the demand that is out there, we are going to see increases in prices, that is only natural,” Gordon said.
He added that there will also be higher prices at the end of June because of the school holidays and constrained availability of flights.
The Competition Commission has however warned against price gouging.
Siyabulela Makunga, the commission spokesperson said they called the meeting because when Comair was suspended in March this year, there were reports of sharp increases in the price of tickets.
The commission said it will monitor airline ticket prices and investigate promptly if they drift into suspicious ranges.
