05 February 2010
	QUESTIONS & ANSWERS Demand and supply Has the airline industry been colluding over ticket prices at the time of the World Cup? Authorities are concerned. Sasha Planting speaks to Comair and kulula CEO Gidon Novick, who is at the centre of the storm

Comair has been accused of price collusion based on an e-mail allegedly sent by the airline to government. Do you deny the charge of collusion? The collusion claim is unfounded. The e-mail was directed to the government World Cup task team to clarify the principles behind the airlines' pricing structures. These pricing principles are general industry knowledge. There has been much confusion around World Cup airline capacity and pricing, and the e-mail explains these elements to the government task team that requested it. How are ticket prices calculated for unusual circumstances such as the World Cup? The airline industry in SA operates on free-market principles - supply and demand dictate price. We have already said we will be increasing our flights. Our prices around the big World Cup games will be similar to the prices that are charged during other peak periods. Gidon Novick Is more communication between the airlines necessary at this time? Definitely not on price. But I'm sure the Airports Company SA will want to get the airlines to co-ordinate operations during peak times. Last year Comair said it is employing "punitive" airfare increases to discourage individual air travel during the World Cup. Is that still your strategy? Prior to the draw in December, we had little idea of the likely demand patterns. Prices of tickets around the time of the World Cup are coming down. Based on Fifa's recent statement, we don't think the number of visitors forecast will materialise. Last week kulula.com ran a sale and sold more than 15 000 seats for the World Cup period for between R299 and R399. Are you seeing the higher prices and volumes for the tournament as an opportunity to rebuild margins? Our normal bread-and-butter business travellers are going to cut back on business trips during the tournament, so we will lose this business. Also, while flights to a particular game may be full, flights in the opposite direction may be empty. The potential spin-off from the World Cup is more tourists in SA in the future. We are not looking to make a quick buck. Is there is a risk that high airline prices will alienate potential customers? Not everyone will be able to afford to travel on peak flights over this period. Most South Africans understand that the World Cup is an exceptional time and that they will need to plan their travel accordingly.