Antitrust: Commission seeks feedback on commitments from Skyteam airline alliance members Air France
21-Oct-2014 The European Commission has invited interested third parties to comment on commitments proposed by Air France/KLM, Alitalia and Delta to address concerns that their transatlantic cooperation may harm competition for premium passengers on the Paris-New York route and for all passengers on the Amsterdam-New York and Rome-New York routes, in breach of EU antitrust rules. The three airlines have offered to make landing and take-off slots available at both ends of the Amsterdam-New York and Rome-New York routes to facilitate the market entry of competitors. They are also prepared to enter into agreements which would enable competitors to offer tickets on their flights and facilitate access to connecting traffic, as well as to provide access to their frequent flyer programmes on all three routes. If the market test confirms that the proposed commitments remedy the competition concerns, the Commission may make them legally binding on the companies.
At this stage, the Commission has concerns that the extensive cooperation between Air France/KLM, Alitalia and Delta in the framework of the Skyteam alliance, involving profit-sharing and the joint management of schedules, pricing and capacity, may result in higher prices on the following routes: Paris-New York (for premium passengers), Amsterdam-New York and Rome-New York (for premium and non-premium passengers). The parties have jointly offered a set of commitments, to alleviate the Commission's concerns.
The commitments are primarily aimed at enabling competing airlines to start operating or extend existing operations on the affected routes by lowering barriers to entry or expansion. The airlines offered to make available landing and take-off slots at Amsterdam, Rome and/or New York John F. Kennedy/Newark Liberty airports on the Amsterdam-New York and Rome-New York routes.
In addition, the companies committed to enter into fare combinability and special prorate agreements with competitors who start operating new non-stop services or increase their non-stop services on the three routes. For Paris-New York, this also applies to existing non-stop competitors on the route. These agreements would enable competitors to offer tickets on the companies' flights and facilitate access to connecting traffic. The companies are also prepared to allow passengers of new entrants without an equivalent frequent flyer programme to accrue and redeem miles on the parties' frequent flyer programmes.
Interested third parties are invited to submit their comments on these commitments proposals to the Commission within one month of publication in the Official Journal.
Background
Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement prohibit agreements and concerted practices which may affect trade and prevent or restrict competition.
In January 2012, the Commission opened a formal investigation into the cooperation of Skyteam members Air France/KLM, Alitalia and Delta on passenger transport on routes between Europe and North America (see IP/12/79). The parties have now offered commitments, with a view to alleviating the Commission's competition concerns. If the market test indicates that the commitments are suitable to remedy the concerns, the Commission may adopt a decision under Article 9 of the EU's antitrust Regulation 1/2003, to make them legally binding on Air France/KLM, Alitalia and Delta.
In July 2010 and May 2013, the Commission had already made binding commitments on respectively the oneworld airline alliance (see IP/10/936) and the Star alliance (see IP/13/456).
More information, including the full non-confidential version of the commitments, is available on the competition website, in the Commission's public case register under the case number 39964.