South Africa's Competition Commission said on Wednesday it has fined national carrier South African Airways (SAA) ZAR55 million rand (USD$8.4 million) for price fixing and abusing its dominant market position.

The latest penalty comes as the state-owned airline braces for a potential loss for the year which ended on March 31.

Africa's largest airline was fined ZAR45 million (USD$6.9 million) last year for anti-competitive behavior by the commission.

In a statement the Competition Commission said the fine related to price fixing by SAA and Lufthansa on their flights between Cape Town, Johannesburg and Frankfurt.

The two carriers have a code-sharing arrangement. The commission is in talks with Lufthansa on the issue.

The commission said SAA was also found to have colluded with budget airline Comair, part-owned by British Airways, and SA Express to simultaneously implement a fuel surcharge levy, which the competition watchdog said amounted to price fixing.

"Comair admitted its involvement in the collusion and agreed to assist the commission with its investigation. Comair further successfully applied for immunity from prosecution," the commission said.

SAA was also penalized for agreements with travel agents, which the Competition Commission said constituted inducements to them not to deal with the airline's competitors.

"The agreements... entrenched and increased SAA's dominance in the market for domestic airline travel and impeded SAA's competitors from expanding and competing fairly in the market," the commission said.

SAA expects a soaring fuel bill to have pushed it into the red for fiscal 2005/06. It reported a ZAR240 million (USD$36.6 million) operating loss in the first half because of oil prices and a wage strike which cost between ZAR100 million and ZAR150 million (USD$15.2 million - USD$22.9 million).