Thursday, October 27, 2016

TAP has violated community rules – Diário de Notícias – Lisbon

TAP and Brussels Airlines have violated the rules of the EU, according to Commission’s preliminary conclusion

The European Commission said TAP and Brussels Airlines to its preliminary conclusion, according to which the cooperation of the airlines in code-share passenger service between Brussels and Lisbon restricted competition, in violation of the rules of the community.

In question is an agreement of code-share agreement between Brussels Airlines and TAP Portugal, in 2009, holding the objections of the European Commission with the first three years of the agreement, prior to which, points Brussels, the two airlines “operating competing services on that route, and were, in fact, the only companies to do it.”

under The terms of this agreement, code-sharing, the two airlines grant each other the right to sell an unlimited number of seats of almost all the categories (business and economy), in the flights on the route Brussels-Lisbon.

at This stage of the investigation, which began in February 2011, the Commission points out that it has reasons to think “that the two airlines were able to apply a strategy the anti-competitive on the route Brussels-Lisbon”, the first of which “the discussion that took place about a reduction of the capacity (number of seats) and an alignment of its pricing policies for the route”.

two Other reasons that lead the Commission to conclude in a preliminary way that there was a violation of the community rules on competition are the fact that the companies have granted each other the unlimited right to sell seats on their flights for the same route (which previously competed), and the application of these provisions through the effective reduction of the capacity, and the alignment of tariff structures and prices of the tickets on that route.

“The Commission considers, on a preliminary basis, that this combination of practices is in breach of the EU rules that prohibit anticompetitive agreements (article 101.º of the Treaty on the Functioning of the European Union). The Commission’s preliminary conclusion is that these practices have eliminated the price competition, reduced the ability of the two airlines on the route Brussels-Lisbon, made rise the prices and limited consumer choice”, points out the executive community in the call “notice of objections” now directed to the two companies.

Stressing that “the sending of a statement of objections does not constitute a judgment in advance of the outcome of the investigation”, the Commission explains that, communicated to the TAP and to the Brussels objections against them deducted, companies can now analyse the documents contained in the investigation process of the Commission, respond in writing and request an oral hearing to present its observations on the case to representatives of the Commission and to national competition authorities.

Commenting on this case, the commissioner responsible for Competition policy, Margrethe Vestager, stated that “the sharing of codes between the two airlines can benefit passengers by providing greater network coverage and better connections.”

“However, we are concerned that, in this specific case, Brussels Airlines and TAP Portugal may have used the sharing of codes to restrict competition and harm the interests of passengers on the route Brussels-Lisbon”, pointed out the commissioner.


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