LPL4802
Oct/Nov PORTFOLIO Semester 2 2026
Unique number:
Due date: 29 October 2026
QUESTION 1: PROHIBITED CONDUCT AND DAMAGES
1.1 Prohibited conduct under the Competition Act
The facts show that control over a major ticket-selling channel can matter as much
as the fares charged to passengers. In the domestic airline setting, the role of
intermediaries provides a practical explanation of how a dominant firm could
influence passenger choice. That is why the effect of the agreements on travel
agents is important to the damages enquiry.
Section 8(d)(i) of the Competition Act 89 of 1998 prohibits a dominant undertaking
from inducing suppliers or customers not to trade with rivals, subject to the statutory
efficiency justification. The enquiry turns on exclusion from the market, not the mere
fact that commission was paid. 1 SAA was dominant in both travel-agent services for
domestic ticket sales and scheduled domestic air transport. Between 1 June 2001
and 31 March 2005 it used third-generation override agreements and additional
, QUESTION 1: PROHIBITED CONDUCT AND DAMAGES
1.1 Prohibited conduct under the Competition Act
The facts show that control over a major ticket-selling channel can matter as much
as the fares charged to passengers. In the domestic airline setting, the role of
intermediaries provides a practical explanation of how a dominant firm could
influence passenger choice. That is why the effect of the agreements on travel
agents is important to the damages enquiry.
Section 8(d)(i) of the Competition Act 89 of 1998 prohibits a dominant undertaking
from inducing suppliers or customers not to trade with rivals, subject to the statutory
efficiency justification. The enquiry turns on exclusion from the market, not the mere
fact that commission was paid. 1 SAA was dominant in both travel-agent services for
domestic ticket sales and scheduled domestic air transport. Between 1 June 2001
and 31 March 2005 it used third-generation override agreements and additional
TRUST payments. Travel agents received rewards for meeting and exceeding SAA
sales targets. Some override commissions applied back to the first rand of sales
after the target had been reached. The payment structure made agents more likely
to direct discretionary customers to SAA, even when those customers might
otherwise have booked with Nationwide. In Nationwide Airlines (Pty) Ltd (in
liquidation) v South African Airways (Pty) Ltd the court accepted the Tribunal finding
that this practice induced agents to favour SAA and impeded competitors from
2
expanding. Travel agents handled about 70% of domestic ticket sales during the
relevant period. The Tribunal found substantial foreclosure, including travel-agent
outlets covering 56% to 76% by number and 70% to 90% when weighted by revenue
or passengers. The conduct was unlawful because the incentive arrangements
reduced rivals’ access to this important distribution channel and reinforced SAA’s
dominant position. Nationwide did not have to show that it had been completely
excluded from domestic aviation. 3
1
Competition Act 89 of 1998 s 8(d)(i).
2
Nationwide Airlines (Pty) Ltd (in Liquidation) v South African Airways (Pty) Ltd 2016 (6) SA 19
(GJ) (hereinafter Nationwide Airlines) [4]–[11], [20]–[26].
3
Nationwide Airlines [5]–[10].
Oct/Nov PORTFOLIO Semester 2 2026
Unique number:
Due date: 29 October 2026
QUESTION 1: PROHIBITED CONDUCT AND DAMAGES
1.1 Prohibited conduct under the Competition Act
The facts show that control over a major ticket-selling channel can matter as much
as the fares charged to passengers. In the domestic airline setting, the role of
intermediaries provides a practical explanation of how a dominant firm could
influence passenger choice. That is why the effect of the agreements on travel
agents is important to the damages enquiry.
Section 8(d)(i) of the Competition Act 89 of 1998 prohibits a dominant undertaking
from inducing suppliers or customers not to trade with rivals, subject to the statutory
efficiency justification. The enquiry turns on exclusion from the market, not the mere
fact that commission was paid. 1 SAA was dominant in both travel-agent services for
domestic ticket sales and scheduled domestic air transport. Between 1 June 2001
and 31 March 2005 it used third-generation override agreements and additional
, QUESTION 1: PROHIBITED CONDUCT AND DAMAGES
1.1 Prohibited conduct under the Competition Act
The facts show that control over a major ticket-selling channel can matter as much
as the fares charged to passengers. In the domestic airline setting, the role of
intermediaries provides a practical explanation of how a dominant firm could
influence passenger choice. That is why the effect of the agreements on travel
agents is important to the damages enquiry.
Section 8(d)(i) of the Competition Act 89 of 1998 prohibits a dominant undertaking
from inducing suppliers or customers not to trade with rivals, subject to the statutory
efficiency justification. The enquiry turns on exclusion from the market, not the mere
fact that commission was paid. 1 SAA was dominant in both travel-agent services for
domestic ticket sales and scheduled domestic air transport. Between 1 June 2001
and 31 March 2005 it used third-generation override agreements and additional
TRUST payments. Travel agents received rewards for meeting and exceeding SAA
sales targets. Some override commissions applied back to the first rand of sales
after the target had been reached. The payment structure made agents more likely
to direct discretionary customers to SAA, even when those customers might
otherwise have booked with Nationwide. In Nationwide Airlines (Pty) Ltd (in
liquidation) v South African Airways (Pty) Ltd the court accepted the Tribunal finding
that this practice induced agents to favour SAA and impeded competitors from
2
expanding. Travel agents handled about 70% of domestic ticket sales during the
relevant period. The Tribunal found substantial foreclosure, including travel-agent
outlets covering 56% to 76% by number and 70% to 90% when weighted by revenue
or passengers. The conduct was unlawful because the incentive arrangements
reduced rivals’ access to this important distribution channel and reinforced SAA’s
dominant position. Nationwide did not have to show that it had been completely
excluded from domestic aviation. 3
1
Competition Act 89 of 1998 s 8(d)(i).
2
Nationwide Airlines (Pty) Ltd (in Liquidation) v South African Airways (Pty) Ltd 2016 (6) SA 19
(GJ) (hereinafter Nationwide Airlines) [4]–[11], [20]–[26].
3
Nationwide Airlines [5]–[10].
