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Regulator terminates Fly 540 predatory pricing case against Jambojet

NEWS
By Paul Wafula | August 2nd 2016

NAIROBI, KENYA: The competition Authority has terminated the predatory pricing case against Kenya Airways' low cost carrier Jambojet due to lack of evidence.
The regulator said in its annual report 2014/15 that it threw out the case filed by Fly 540 Aviation case.
"Fly 540 has alleged that Kenya Airways through their wholly owned subsidiary Jambojet is engaging in predatory pricing," the report reads in part.
According to the authority, the case hinged on predating on competitors to force them to exit the market to the detriment of the consumer.
"The conduct relates to abuse of dominance which is prohibited under section 24 of the Act. The investigation was terminated since there was no conclusive evidence," the report adds.
This is set to be a setback for Fly540 which does not have a comparative financial and infrastructure muscle to deal with the price wars waged by Kenya Airways since it launched its operations.
The aviation industry has witnessed several price wars since 2011 as soon as the national carrier announced plans to set up a dedicated low cost carrier in a bid to recruit new fliers on the domestic market.
The war escalated this year when Fastjet got its licence to start its operations from Kenya. This saw operators slash their fares on some routes.
The traditional budget airlines such as Jet Link, Fly540 and Air Kenya have been forced to counter the price cuts in a bid to protect their market share.
This has seen consumers emerge the biggest winners with air fares dropping to as low as Sh5,000 on some domestic routes for advance booking.

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