ALITALIA/MERIDIANA- ALITALIA/MINERVA AIRLINES
PRESS RELEASE
The Antitrust Authority has prohibited the agreement between Alitalia and Meridiana but has authorized another agreement between Alitalia and Minerva for a limited period.
The Antitrust Authority has concluded two investigations: a code-sharing agreement between Alitalia and Meridiana, and a franchising agreement between Alitalia and Minerva. The Authority found that both these agreements limited competition, even though in the case of the Alitalia/Minerva agreement it granted a waiver as an exemption to the general rule.
These agreements had been notified to the Authority in order to obtain authorization or, as a subordinate measure, a temporary waiver to the prohibition provided by Section 4 of the Antitrust Act in cases where the agreements brought significant benefits to consumers.
Under the code-sharing agreements between Alitalia and Meridiana, the two airlines were to service the routes jointly, sharing the same flight code on the Bologna-Palermo, Turin-Catania, Pisa-Catania and Rome-Malpensa routes. Furthermore, on three of these routes a block space agreement had been made, under which any available seats on the plane would be shared between the two airlines.
The Authority considered that these agreements were intended to coordinate conduct on the four routes at issue, and were likely to limit effective and potential competition between the two airlines. During the course of the proceeding it was found that the fares charge by the two companies, had anticompetitive effects, because both of them had raised fares on the four routes for which the agreement had been made.
The Authority therefore considered that the conditions required for an exemption did not obtain, and accordingly prohibited the agreement.
The franchising agreement between Alitalia and Minerva provided for the coordination of the scheduled services run by the two companies on all the routes operated by Minerva to which the Alitalia mark had been assigned, and guaranteed its support for its distribution structure using the typical features of franchising arrangements operated between airlines. The agreement covered to all the routes operated by Minerva (27 routes, mostly with small volumes of traffic).
The Authority felt that since Alitalia and Minerva were potential competitors, the agreement that had been notified limited competition because it involved the total coordination of all Minerva's and Alitalia's operations.
However, the agreement between Alitalia and Minerva enabled both airlines to save on certain costs (for Alitalia, the cost of using smaller aircrafts, and for Minerva, marketing costs) which had increased the offering (new routes, and an increase in the number of flights) the benefits of which had, at least partially, been handed on to consumers.
Having ascertained that this arrangement was in compliance with the conditions provided by Section 4 of the Antitrust Act, the Authority therefore granted an exemption for a three-year period from the date on which the franchising agreement became effective, expiring on 31st January 2001.
Rome, 3rd February 1999