WRITTEN QUESTION E-4040/00

by Sérgio Sousa Pinto (PSE) to the Commission

(21 December 2000)

Subject: Competition policy abuse of dominant position

Can the Commission provide information on the market position and practices of the Qualifyer Group of airlines (a grouping of the following airlines: Swissair, Sabena, TAP Air Portugal, AOM French Airlines, Crossair, Air Littoral, Air Europe, LOT Polish Airlines, PGA Portugália Airlines, Volare Airlines and Air Liberté, which is administered by Qualifyer Loyalty Ltd)?

Citizens and consumers have extremely good reasons to fear confirmation of the presumptions that this business group is abusing its dominant position, thus giving rise to higher fares, less choice of services and unfair trading conditions, notably in the case of the Brussels/Lisbon-Porto route. These potentially abusive and anti-competitive practices may prove to be contrary, in particular, to Article 82 of the EC Treaty.

Answer given by Mr Monti on behalf of the Commission

(27 February 2001)

The Qualiflyer group is an alliance between airlines, characterised by the fact that the SAirGroup, Swissair's parent company, has a policy of investing in the capital of certain other airlines in the alliance. In many cases, such participation gives the SAirGroup joint control, together with other shareholders, of the airline in which it invested. Qualiflyer Loyalty Ltd. is the company that administers the common frequent-flyer programme of the participating airlines, but it does not manage the Qualiflyer group.

The Commission has taken a position on transactions whereby the SAirGroup acquired joint control over other Qualiflyer group airlines. In 1995, the Commission adopted a decision(1) declaring the Swissair/Sabena concentration compatible with the common market. In 1999, the Commission adopted a decision approving the acquisition of AOM by the SAirGroup and Maríne-Wendel, a French financial holding company. In 2000, the Commission authorised the AOM/Air Liberté/Air Littoral concentration.

The Commission has also recently examined the compatibility with Article 81 (ex Article 85) of the EC Treaty of the agreements concluded among the Qualiflyer group airlines. In February 2000, the Commission sent a warning letter to five Qualiflyer group airlines (Swissair, TAP, Sabena, Crossair and AOM), following which these companies ceased to coordinate prices within the Community and on the routes between the Community and Switzerland.

Competition concerns under Articles 81 and/or 82 (ex Article 86) of the EC Treaty are more likely to arise on overlap routes, that is, on routes operated by two Qualiflyer group airlines with their respective hubs at each end of the route, such as the Brussels-Lisbon route. Given this situation, the Commission would appreciate receiving any information that the Honourable Member may have on a potential abuse of a dominant position or on other anti-competitive practices on this route.

On other routes, such as the routes to and from various French cities operated by AOM, Air Liberté and Air Littoral, the Qualiflyer group airlines compete with the traditional flag carrier.

The Portuguese government announced its intention to sell a stake in TAP some time ago. However, the Commission has not been notified of any such operation.

(1) OJ L 239, 7.10.1995.