Nationwide Airlines (Johannesburg O.R. Tambo) is suing South African Airways (SA, Johannesburg O.R. Tambo) for ZAR325 million (USD20.36 million) in damages. According to Johannesburg High Court papers seen by BusinessDay, Nationwide‚ now in liquidation‚ is basing its case on a 2010 Competition Tribunal finding that SAA did indeed abuse its dominant market position to divert customers from competitors.

Nationwide alleges that SAA, from June 2001 to March 2005, had violated the terms of the country's Competition Act by paying commissions to travel agents thus diverting passengers away from competitor airlines.

SAA allegedly signed "override incentive agreements" with travel agents where the latter earned a percentage commission of the sale price. When sales reached a certain target set by SAA, an additional incentive was paid. There were also "trust agreements", to reward travel agent loyalty, the carrier claimed.

Nationwide's former chief operating officer Rodger Whittle also highlighted SAA's alleged anticompetitive practices including an aggressive recruitment drive which saw twenty-two Nationwide flightcrew leaving the firm for the state-backed carrier "over night". This, Whittle said, severely jeopardized Nationwide's flight operations at the time. In addition, he claimed SAA had also helped orchestrate a government ban on BAC 1-11-500s flying above 25,000ft thus forcing his airline to replace its then fleet.

SAA has yet to make its defence but will argue that prohibited practice was not the sole cause of Nationwide's losses claiming other factors such as an ageing fleet, SAA’s Voyager Frequent Flyer programme as well as government business also contributed. It will also claim that as Nationwide has not proven any damages, any damages awarded should be assessed at ZAR 0.

Nationwide’s claim is for ZAR171.7million (USD10.75 million) in damages, plus interest calculated from 2010, which totals about ZAR325 million (USD20.36 million).

The suit is one of several Nationwide has filed against SAA in recent years. Previously, SAA had settled for an undisclosed amount outside court for damages relating to the period from 1999 to 2001.

Between 1995 and 2008, Nationwide operated scheduled passenger flights around South Africa as well as to Bulawayo in Zimbabwe, Livingstone in Zambia and London Gatwick in the United Kingdom.