easyJet has submitted an appeal to the Court of First Instance in Luxembourg, requesting that the Court annul the European Commission’s clearance of the Air France/Alitalia alliance.
easyJet wholeheartedly supports the much-needed consolidation of the European airline industry and has long argued that it is unsustainable for each and every country to have its own national airline. It is vital, however, that the interests of consumers come first as this consolidation occurs.
This is why easyJet takes issue with the European Commission’s clearance of the Air France/Alitalia alliance. When two dominant carriers strike bilateral arrangements for a long-term alliance, it is vital that all necessary steps are taken to avoid a distortion of the market and any consequent drop in competition. Unfortunately, the Commission got it wrong again as it did previously when it gave the green light to the AF/KLM merger.
As currently stands, easyJet believes that consumer choice will be reduced by the Air France and Alitalia alliance. The European Commission should not have given its approval for the alliance on the following grounds:
á the Commission’s failure to investigate sufficiently whether the alliance would result in benefits to consumers as opposed to benefits to both parties
á the Commission’s assessment of the arrangements between Air France and Alitalia on the routes between France and Italy on the basis of a co-operation agreement when it is actually a merger of Air France and Alitalia’s operations
á the Commission’s failure to assess the effects of the Alliance on the correct markets. It did not consider the Parties as “purchasers of airport services” and therefore concluded incorrectly that Paris Charles de Gaulle and Paris Orly airports are part of the same market for provision of scheduled air services.
á the Commission’s failure to secure adequate commitments from Air France and Alitalia to counter the anticompetitive effects of the Alliance. Crucially, the number of slots that the parties are required to give up and their timing will not enable another airline to compete against the parties on routes between France and Italy.
á the Commission’s acceptance of Air France and Alitalia right to chose at which airports in Milan and Paris to give up slots, rather then allowing competitors to start new services at the airport, from which they could offer the most effective competition.
á the Commission’s failure to take any account of the fact Air France and Alitalia are dominant at their respective hub airports in Paris and Milan and that on many routes between France and Italy they are the only operators
easyJet Chief Executive, Ray Webster, said: “I cannot stress the importance of competition in the airline industry, without a level playing in Europe easyJet is prevented from offering consumers the best deal. For far too long, flag carriers have been able to keep a fortress hold on their markets. This is why easyJet relies especially on the European Commission to defend the interests of Europe’s consumers and ensure that any impediments to greater competition are no longer tolerated.
“As I see it, the European Commission has failed to address the concerns raised by the Air France and Alitalia alliance. Airlines such as easyJet, which are likely to be the main source of competition to the alliance, are once more discriminated against and prevented from mounting an effective challenge to Europe’s goliath airlines. This is despite the fact Alitalia is facing serious financial difficulties and the Commission has once again conditionally approved loans for Alitalia from the Italian government. There is no doubt in my mind, that any benefits for consumers that could result from the Alliance would not be sufficient to outweigh the elimination of competition on routes between France and Italy’‘.