AVIATION FUEL
PRESS RELEASE
PRESS RELEASE
AVIATION FUEL: THE COMPETITION AUTHORITY HAS EXPANDED ITS INVESTIGATION INTO AIRPORT FUEL SUPPLIES. ITALIAN AIRLINES ARE BEING OVERCHARGED
At its meeting on 6 April 2005, the Competition Authority decided to extend the investigation into a number of petroleum companies to include other parties, in order to ascertain the existence of presumed agreements regarding the marketing of aviation fuel storage and refuelling services in Italian airports.
The companies involved under investigation are: R.A.M.- Rifornimenti Aeroportuali Milanesi S.r.l. (a company owned by Shell, Tamoil e Total), Shell Italia Aviazione S.r.l. and Par S.r.l. (controlled by a pool including ENI, Esso and Kuwait, which stores petroleum products and provides refuelling services at Palermo and Naples Capodichino airports). These companies are also being investigated for possible violations of article 81 of the EC Treaty,
Initially, the following companies were investigated: Eni S.p.A., Esso Italiana S.r.l., Kuwait Petroleum Italia S.p.A., Shell Italia S.p.A., Tamoil Petroli S.p.A., Total Italia S.p.A., Disma S.r.l., Seram S.r.l., Hub S.r.l., and Rifornimenti Aeroporti Italiani S.r.l..
More specifically, petroleum companies are also operating on the aviation fuels market through fuel storage and refuelling joint ventures: Hub and RAI are the two leading joint ventures operating at the Rome Fiumicino, Milan Malpensa and Milan Linate airports, and are owned by two groups of petroleum companies (one is owned Eni, Esso and Kuwait, and one is owned by Shell, Tamoil and Total); in addition to these two there are also the Disma and Seram companies which are owned by five of the aforementioned petroleum companies.
The original investigation, which began in December 2004, was started as a result of information submitted to the Authority showing that the companies providing jet fuel storage and refuelling services also directed markets jet fuel, including managing the exchange of products and exchanging information between the parent companies on the supply of jet fuel to airlines. Since these companies were joint ventures created between the petroleum companies themselves, their commercial jet fuels marketing operations was potentially able to give the parent companies the power to control the flow of fuels supplied by each of them to airports, and hence to control each company's market share. The lack of competition on the aviation fuel market was likely to substantially hamper the competitiveness of the national airlines, the petroleum companies' main customers, on the market under examination.
In the Authority's opinion, aviation fuel prices charged in Italian airports, which are higher than those charged in other European countries, could be considered to be the direct effect of an agreement concluded between the aviation fuel companies. These effects, moreover, were likely to be particularly damaging to the competitiveness of Italy's national airlines who are forced to buy fuel in Italian airports much more frequently than their foreign-based competitors, imposing higher costs on them for the purchase of aviation fuel.
Lastly - even where Italian national airports alone are involved - this conduct is also potentially liable to damage intra-community trade and violate article 81 (1) of the EC Treaty which prohibits any agreements between companies that might jeopardise trade between the member states and which are intended to prevent, limit or distort competition.
Rome, 15 April 2005