COMPAGNIE AEREE-FUEL CHARGE
PRESS RELEASE
PRESS RELEASE
THE COMPETITION AUTHORITY HAS IMPOSED FINES ON ALITALIA AND OTHER AIRLINES FOR AGREEMENTS ON FUEL SURCHARGES
The Competition Authority has resolved that Alitalia Linee Aeree Italiane S.p.a., Meridiana S.p.A, Alpi Eagles S.p.A., Air Europe S.p.A, Volare Airlines S.p.A and Air One S.p.A had colluded to simultaneously apply an identical fare surcharge between June 2000 and April 2001 (known as the 'fuel surcharge').
In June 2000, Alitalia, Meridiana, Air One and Alpi Eagles, following an exchange of information encouraged and coordinated mainly by Alitalia according to the evidence, simultaneously introduced an identical fuel-related surcharge (of 10,000 lire) applicable to all domestic routes, indicated separately from the basic fare.
Subsequently, in August 2000, Alitalia announced its intention to raise the supplement (from 10,000 to 24,000 lire for each route). Volare Airlines, Air Europe, Alpi Eagles and Air One directly or indirectly notified Alitalia that they also intended to raise their fuel surcharge, and implemented identical fare increases to the one announced by Alitalia.
The simultaneous application of an identical fuel surcharge effectively enabled the airlines to 'freeze' the market situation. Thanks to the fuel surcharge, the airlines had achieved the purpose of keep their respective fare structures unchanged, while neutralising the potential impact on the market of the cost shock due to the increased fuel prices, to the detriment of competition.
This complex collusion policy jointly implemented by Alitalia, Meridiana, Alpi Eagles, Air One, Volare Airlines and Air Europe to coordinate their pricing strategies may be considered to be one of the most serious restrictions on competition, by hampering the capacity to guarantee allocative efficiency and keep price levels as low as possible.
Furthermore, the jointly agreed price increases were introduced by the main airlines to cover the whole of Italy, with the result that costs to consumers rose steeply not only in actual terms (initially by 10,000 lire and then by 24,000 lire for each route) but with a proportionally greater impact on the lower fares (up to about 20%).
Even though the agreement that has been identified is a serious offence, the Authority has decided to hand down a very lenient fine, considering the serious market situation at the time the surcharge was introduced as a result of the sharp, substantial increase in aeroplane fuel costs and the repercussions of the structural crisis affecting the whole of the air transport industry following 11 September 2001.
The Authority has also adjusted the fine according to the different role each airline played in the agreement, and taking account of such mitigating circumstances as the measures adopted by some of the airlines to remove the surcharge.
The fines imposed were: Alitalia, as the promoter and coordinator of the agreement, 1,582 million euro; Meridiana 86,000 euro, Alpi Eagles 19,000 euro, Air Europe 62,000 euro, Volare Airlines 52,000 euro and Air One 35,000 euro.
Rome, 8 August 2002