Notice pursuant to Article 5 of Regulation (EEC) No 3975/87 of 14 December 1987 concerning case IV/37.749 - Austrian Airlines Österreichische Luftverkehrs AG and Scandinavian Airlines System (Text with EEA relevance)
Date: 2000-07-11
Institutions: European Commission
Subjects: Austria, Northern Europe, air transport, competition policy, cooperation agreement

C 193/8

EN

Official Journal of the European Communities

11.7.2000

4. The cooperation agreement does not afford the parties
the opportunity of eliminating competition in respect
of a substantial part of any market

limited, given the

The parties put forward that the structural effects of the
cooperation agreement are
limited
overlap between the parties networks, the importance of
transfer passengers and actual and potential competition.
The claim not to be in a position to eliminate competition
of a substancial part of traffic between Austria and Germany
or of the traffic to third countries. To the contrary, the
cooperation agreement will
in
competition between different alliances. By improving
their offer of transport services and their ability to adapt
prices in a coordinated way, the parties will force other
alliances to make similar improvements to the benefit of
their customers.

lead to an increase

IV. CONCLUSION

that

The Commission, having established prima facie
the
agreement in question meets the test of Article 81(1) of the
EC Treaty, has not taken a position as to the applicability of
Article 81(3). In accordance with Article 5 of Council Regu-
lation (EEC) No 3975/87, the Commission invites interested
parties to send their comments concerning the cooperation
agreement between Austrian Airlines and Deutsche Lufthansa,
within 30 days of the date of publication of this notice, to:

European Commission,
Directorate-General for Competition,
For the attention of Oliver Stehmann,
Unit IV/D2,
Office C 100 (cid:151) 6/134,
Rue de la Loi/Wetstraat 200,
B-1049 Brussels,
fax (32-2) 296 29 11,
e-mail: Oliver.Stehmann@cec.eu.int

Notice pursuant to Article 5 of Regulation (EEC) No 3975/87 of 14 December 1987 concerning
case IV/37.749 (cid:151) Austrian Airlines (cid:214)sterreichische Luftverkehrs AG and Scandinavian Airlines
System

(2000/C 193/06)

(Text with EEA relevance)

I. THE APPLICATION LODGED BY SCANDINAVIAN AIRLINES
SYSTEM (SAS) AND AUSTRIAN AIRLINES (AUA)

frequent flyer programme, airport facilities, cargo services and
other areas in which both parties have a mutual interest.

On 30 December 1999, Austrian Airlines and Scandinavian
Airlines System notified a cooperation agreement pursuant to
Article 5 of Council Regulation (EEC) No 3975/87 for a
decision applying Article 81(3) of the EC Treaty and Article
53(3) of the EEA Agreement to the alliance concluded between
them.

II. PROVISIONS OF THE AGREEMENT

The cooperation agreement and its implementing agreements
are regarded as a step for the Austrian Airlines Group to join
the STAR alliance. The parties envisage to cooperate in several
areas such as generally applicable service standards, network
cooperation, the establishment of a joint traffic system, code
fares and special pro-rates, marketing and sales,
sharing,

traffic system (JTS)

The worldwide cooperation includes a joint planning of
schedules in order to maximise hub feed, the coordination of
pricing policies, route programs and capacity. Services shall be
provided on equal terms to passengers on code shared flights
or joint
far reaching
cooperation has been agreed on the traffic between Austria
and the nordic countries (Norway, Sweden and Denmark).
The JTS applies to all air transport services between Austria
and the nordic countries for which the parties share profits and
losses. Any joint traffic flight shall be operated as a code-shared
flight.

flights. The most

III. REASONS FOR EXEMPTION

The parties have put forth the following arguments in support
of the application of Article 81(3):

11.7.2000

EN

Official Journal of the European Communities

C 193/9

1. Improvements in the provision of airlines services and

promotion of economic progress

According to the parties their networks are mainly comple-
mentary with the exception of the Austria-nordic countries
market. By integrating their networks, the parties expect to
create a more extensive European network which will, in
particular, lead to a better connection with eastern European
countries. The combination of both networks will create
new connections likely to generate an increase in demand.
By coordinating their networks, they expect to improve the
production and distribution of their air and ground services
in terms of more efficient use of the combined resources.

The parties put forward that the cooperation agreement will
lead to cost reductions by attracting more passengers and
thus take advantage of economies of scale, better organi-
sation of distribution systems and ground services and the
joint development of
intensive production and
distribution methods.

cost

2. Consumers will share the benefits from the coop-

eration agreement

improved services.

The parties argue that customers would benefit from the
creation of a more extensive network by getting access to
a range of
Improved services can be
expected from a better coordination of flight schdules, an
increased number of
flights and transfer connections,
shorter waiting time, no need to move between terminals,
harmonised service standards on the plane and for ground-
handling. Cost reductions would lead to lower fares. The
parties also argue that consumers will benefit indirectly in
terms of a more environment-friendly use of resources due
to the cooperation.

require a substantial pooling of material and of human
and financial resources. According to the parties, a mere
code-sharing, or
interlining agreement would not be
sufficient to achieve these gains, as it would not allow to
optimise the use of planes and thereby the flight schedules.

4. The cooperation agreement does not afford the parties
the opportunity of eliminating competition in respect
of a substantial part of any market

The parties have put forward that the structural effects of
the cooperation agreement are limited, given the limited
overlap between parties’ networks,
the importance of
transfer passengers and actual and potential competition.
They claim not to be in a position to eliminate competition
traffic between Austria and the
of a substantial part of
the traffic to third countries. To
nordic countries or of
the contrary, the cooperation agreement will
lead to an
increase in competition between different alliances. By
improving their offer of
services and their
ability to adapt prices in a coordinated way, the parties
will force other alliances to make similar improvements to
the benefit of their customers.

transport

IV. CONCLUSION

that

The Commission, having established prima facie
the
agreement in question meets the test of Article 81(1) of the
EC Treaty; has not taken a position as to the applicability of
Article 81(3). In accordance with Article 5 of Council Regu-
lation (EEC) No 3975/87, the Commission invites interested
parties to send their comments concerning the cooperation
agreement between AUA and SAS, within 30 days of
the
date of publication of this notice, to:

3. The cooperation agreement does not impose on the
parties restrictions which are not indispensable to the
attainment of the objectives of the agreement

According to the parties the establishment of a larger
European network requires
cooperation
between the two airlines. The goal of operating as a single
the parties
integrated network could not be achieved if
retained the ability to compete for traffic between Austria
and the nordic countries. The envisaged cost reductions

an extensive

European Commission,
Directorate-General for Competition,
For the attention of Oliver Stehmann,
Unit IV/D2,
Office C 100 (cid:151) 6/134,
Rue de la Loi/Wetstraat 200,
B-1049 Brussels,
fax (32-2) 296 29 11,
e-mail: Oliver.Stehmann@cec.eu.int