Stampa

Air transport: CAI measures within 90 days to remove the monopoly position on the Milan Linate and Rome Fiumicino route


PRESS RELEASE


AIR TRANSPORT: ANTITRUST - ALITALIA-AIRONE MERGER MONOPOLIZES THE LINATE-FIUMICINO ROUTE. THE COMPANY HAS NINETY DAYS TO PRESENT THE AUTHORITY WITH MEASURES TO REMOVE THIS POSITION BY 28th OCTOBER 2012

The competitive pressure of the high-speed train is insufficient to limit Alitalia-CAI's market power, especially for passengers who need to return the same day

 

In 2008, the Alitalia-AirOne concentration created a monopoly on the Linate-Fiumicino route that has persisted and must be removed by October 28th. The company has been given three months to present the Antitrust with measures to achieve this end. This was the Authority's decision at the conclusion of an investigation initiated last November according to the special procedure from decree law no. 134 of 28th August 2008, which suspended the Authority's authorization powers for this concentration.

For the route in question, according to the Antitrust, Alitalia-CAI is free of competitive pressures from other airlines because of how Linate's specific regulations and administrative rules make it impossible to acquire slots at this stop.

While the high-speed rail transport service represents an important development, connecting Rome to Milan in under three hours ever since late 2009, it is still incapable of bringing Alitalia-CAI's behavior sufficiently under control by shifting a meaningful portion of the demand from air to rail or by reducing ticket prices to the benefit of the passengers.

The shift in demand from air transport to high-speed rail transport, however, is decisively more contained during the morning and evening time slots, which are the most profitable, that permit for same-day round trips. For passengers who tend to prefer these time slots, however, rail still appears to offer a limited degree of substitutability with air so that it is only partially able to constrain the market power of Alitalia-CAI.

According to the Antitrust, the removal of Alitalia-CAI's Linate-Fiumicino market power seems to call for a competitive restriction that could only be imposed by the presence of another airline that would contend with Alitalia-CAI for the passengers of early morning and late evening flights. To offer a credible alternative to the incumbent, a new airline would need to have access to a number of time slots that was sufficient to ensure a minimum offer and flight frequencies that could guarantee an adequate supply for the highest-demand time slots.

With respect to the national routes from/to Rome and the Naples-Turin and Naples-Venice routes, the Antitrust found that Alitalia-CAI's market position, as created by the operation in 2008, was unquestionably strengthened yet still fully contestable. In confirmation of this, the three years following the concentration witnessed the entry of new airlines and the strengthening of already active ones.

For the routes between Milan and Bari, Brindisi, Naples, Palermo and Lamezia Terme, lastly, for which same-day round trips are much less prevalent, the Alitalia-CAI position felt the competitive pressures of the airlines that service these routes from Linate as well as the pressures exerted by those operating from/to Malpensa. In this respect, the greatest competitive pressures are exerted by EasyJet, Meridiana and Windjet.

 

Rome – 17th April 2012