ALITALIA: MEASURES PRESCRIBED TO ENSURE MORE USER-FRIENDLY AND TRANSPARENT CONDITIONS OF SERVICE
PRESS RELEASE
PRESS RELEASE
AIR TRANSPORT: ANTITRUST AUTHORITY SAYS CAI MUST GUARANTEE BROAD FARE CHOICES. AT LEAST 10% OF TICKETS MUST BE SOLD AT THE LOWEST ECONOMY FARE OFFERED BY ALITALIA AND AIRONE ON THE SAME ROUTE IN THE PRECEDING SEASON
Measures prescribed for ensuring more user-friendly and transparent conditions of service. In order to protect passengers, CAI must guarantee payment of compensation, in proportion to the cost of the ticket, in the case of cancellation of flights or long delays. Accepted and rendered binding the company's commitment to apply its loyalty program on all routes. By 3 December 2011 a new deadline to be fixed for ending monopoly positions.
The Italian Competition Authority, at its meeting on 3 December 2008, set out for CAI, Compagnia Aerea Italiana, the measures necessary for avoiding the risk of unjustifiably onerous prices and other contractual conditions being imposed on consumers: the new airline will have a dense network of routes covering the whole country and on individual routes will have, if not a monopoly, certainly a leading position in terms of frequency of currently available flights.
Based on Legislative Decree no. 134 of 28 August 2008, therefore, the Authority decided that for a period of three years from the start of CAI's operations:
1) CAI's published fares must be structured in such a way as to ensure broad coverage of the requirements of all segments of the market: discounted fares must be adequately accessible throughout the year, on all routes, on every flight;
2) CAI must guarantee availability on every flight of at least 10% of tickets at the lowest economy fare offered by the Alitalia group and the AirOne group on the same route in the previous corresponding IATA season. This is to protect the most price-sensitive segment of passengers from the risk of unjustified price increases following the merger;
3) Within one month of the start of the new airline's operations, a free telephone line must be set up to manage service problems in the case of flight cancellations or serious delays, as well as an information area on the website giving news of flight operations and providing consumers with information about the status of their cancelled or delayed flights. CAI must set up a mobile phone message service that provides full real-time availability of flight information to consumers who request it. This will ensure more user-friendly and transparent conditions of service;
4) CAI must guarantee, above and beyond the requirements of EU regulations, payment of compensation, in proportion to the cost of the ticket, in the case where a flight is cancelled and a passenger does not receive adequate rerouting (arrival at destination within two hours of scheduled time) or where a long flight delay means a passenger arrives more than two hours later than the scheduled time. This is to encourage improved quality of service which otherwise might be adversely affected by the reduced level of competition.
These measures complement the commitment proposed by CAI and rendered binding by the Authority, also for a duration of three years, to run a frequent flyer program that ensures broad coverage of national and international routes; an initiative that, in the absence of the complementary measures, would not have been sufficient to obviate the risk of unjustifiably onerous prices and other contractual conditions being imposed on consumers as a result of the merger.
On the other hand, the Authority took note of CAI's commitment to redistribute 50 slots from the Linate-Fiumicino route to other routes into and out of Linate; this was however deemed to be extraneous to the consumer protection objectives of decree-law no. 134/2008.
The Authority fixed 3 December 2011 as the date by which it must set a new deadline for the ending of any monopoly situations.
Finally, the Authority, whose powers regarding anti-competitive arrangements and abuse of dominant positions remain intact, reserves the right to check that services offered by airport management companies in which CAI shareholders have an interest do not discriminate against or exclude competing airlines.
Rome, 3 December 2008