SAA on Alleged Air-ticket Price Collusion and Incidents of Mishandling of Baggage: Cancelled

Meeting report

The Chairperson said the presenters for SAA and SA Express Airways were running late. There was a slight change in the agenda. Airports Company South Africa (ACSA) and the Civil Aviation Authority (CAA) were not going to present to the Committee, as reports from these entities on these matters had already been tabled with the Transport Portfolio Committee as they were overseen by that committee.

Transport Committee members had been invited by the Committee Secretary to attend this meeting; however, the Chairperson of the Committee, Ms N Bhengu, was not been told. When Ms Bhengu heard about the meeting she informed the Chairperson that the Transport Committee had already addressed many of the issues that this Committee wanted to resolve. The two Chairpersons agreed that members would study the reports presented to the Transport Committee and if there were still issues that needed to be resolved, they would call a joint meeting to address them. They felt that a joint meeting was needed to address the matter of jet fuel, as this was a subject that had not been adequately addressed.

Pebble Bed Modular Reactor (PBMR) CEO resignation
The Chairperson informed the Committee that the Chief Executive Officer (CEO) of Pebble Bed Modular Reactor (Pty) Ltd (PBMR), Mr Jaco Kriek had resigned. PBMR’s funding had been cut and the entity was being repositioned and downsized because the government had not received value for money since its inception. She was not sure why the CEO had resigned so abruptly.

Dr M Oriani-Ambrosini (IFP) said this issue should be tagged as an urgent matter and that PBMR be called to Parliament as soon as possible. Parliament could still have some input in determining the future of PBMR.

Ms G Borman (ANC) agreed with the suggestion. The Committee should include PBMR in its programme.

The Chairperson would find an opening in the programme to fit PBMR in before the end of the first quarter.

South African Airways briefing
The Chairperson stated that it was unfortunate that she could not congratulate Ms Siza Mzimela on her new position as CEO of SAA, as she was not even at the meeting. It was terrible to arrive late on her first appearance in Parliament.

Ms Louisa Zondo, General Counsel: SAA, explained that she had been told that Ms Mzimela had communicated to the Committee that she was unable to attend the meeting. Another colleague of Ms Zondo’s was also supposed to attend the meeting; however, he was running late.

The Chairperson replied that Ms Zondo was misinformed. The Chairperson had accepted an apology from the SAA board chairperson who could not attend the meeting. Mr Chris Smyth, General Manager: Operations and previously Acting CEO, had also informed the Chairperson that he would not be able to attend. Ms Mzimela on the other hand had not stated, formally nor informally, that she was not able to attend. The Chairperson stated that it was imperative that the Committee know why Ms Mzimela was absent from the meeting.

Ms Zondo answered that the only thing she had been told was that Ms Mzimela had indicated her inability to attend the meeting. She offered to step out and communicate the matter to the CEO.

The Chairperson said that this was greatly disrespectful to the Committee. Members could not be second-guessing whether Ms Mzimela was going to attend the meeting.

Ms Borman said the Committee was very disappointed. If the CEO could not attend, she should have sent her deputy to ensure that somebody at her level was present at the meeting.

The Chairperson said that Ms Zondo calling Ms Mzimela would have no effect. It would not bring her to the meeting as she was still in Johannesburg.

Mr P van Dalen (DA) stated that he was a busy man and could not wait for people to show up at the meeting. This problem needed to be resolved.

Mr C Gololo (ANC) wanted to hear the reasons for Ms Mzimela’s absence. The Committee could not argue about it unless they knew why she was not at the meeting.

The Chairperson noted Mr Gololo’s comments, but explained that the Committee was already unhappy that she had not communicated anything to them.

Dr Oriani-Ambrosini wanted to know why Ms Zondo was there.

Ms Zondo explained that she was the General Counsel for SAA and had been told to represent SAA at the meeting on aspects that related to pricing issues. Another official, Mr Tebogo Tsimane, who was responsible for airport operations, was also supposed to be present at the meeting.

The Chairperson commented that she was inclined not to let SAA give their briefing. SAA had to bring their full team. The Committee had begged SAA for months to address the issues on the agenda. She had even told the Committee researcher to investigate claims that SAA had been found guilty of collusion by the Competition Commission on 18 February 2010.

Dr van Dyk (DA) agreed that a full SAA delegation should attend the next meeting, which had to be led by the CEO.

Dr Oriani-Ambrosini disagreed with the Chairperson and Dr van Dyk. He said the reason that Ms Zondo was there alone was clear from the presentation that the Committee had been sent. He explained that the Committee had asked SAA to come to Parliament to address collusion. The presentation basically showed that SAA was not going to say anything about the matter as it was “sub judice”. SAA sent Ms Zondo to the Committee to tell Members the same thing. The sub judice rule had been repealed two years previously and was unconstitutional. The rule also did not apply to investigations.

The Chairperson said she did not want to go in to the merits and demerits of the case.

Dr Oriani-Ambrosini explained that there was a pattern of defiance. He had raised this issue many times, talking about compliance with the Committee’s needs, which included being sent all the relevant documents explaining the anti-competitive behaviour allegations. He asked about anti-competitive behaviour in South Africa and the United States, the United Kingdom, Switzerland and Australia.

The Chairperson agreed with Dr Oriani-Ambrosini, however, she ruled him out of order because she wanted to separate the two issues.

Dr Oriani-Ambrosini said SAA could not shield itself with legalities the next time they addressed the Committee.

Mr Gololo urged the Committee to agree that SAA should return to the Committee with a full delegation and a presentation by Ms Mzimela.

The Chairperson agreed that saying that the matter was sub judice did not “hold water”. The next time the Committee had a meeting with SAA they should bring a full report and a delegation. The SAA CEO and Chairperson had to attend the meeting. The Committee would not accept the sub judice argument and wanted a report on whether SAA was really found guilty of collusion on 18 February 2010.

Dr van Dyk stated that Ms Zondo had to tell SAA officials that SAA was a public enterprise and therefore its affairs were of public concern.

Dr Oriani-Ambrosini added that when SAA came back to the Committee, the scope of enquiry should not be limited to allegations in South Africa; they should include the US, UK and Australia.

The Chairperson said she had received a phone call from the BBC on the collusion issue. However, she had not taken the call and she did not reply to their emails. She warned SAA that the world was watching the country in relation to the 2010 FIFA World Cup. She hoped that when SAA returned, they would not use “sub judice” as an excuse.

Dr Oriani-Ambrosini noted that the enquiries of price collusion would take a long time and would be finalised after the FIFA World Cup. He suggested that they “cut” through the issue and impose a four month promotion on all South African airlines where tickets would be sold at $999 each from anywhere in the world to come to South Africa. Promoting the country was acceptable in terms of World Trade Organisation (WTO) rules.

The Chairperson stated that the Committee could not prescribe a price. This was completely outside the Committee’s mandate. She ruled Dr Oriani-Ambrosini out of order.

Mr van Dalen added that there was very little time before the FIFA World Cup and the matter needed to be resolved urgently.

The Chairperson stated that the Committee would meet with SAA on Tuesday, 16 March 2010.

The meeting was adjourned.