"The EC competition commissioner's interest in the BA/AA alliance is curious - the competition department has failed to involve itself in more significant airline competition issues."
By seeking to stamp his authority on the proposed alliance between British Airways and American Airlines, the European Commission (EC) competition commissioner, Karel van Miert, has done nothing but demonstrate how weak -even illusory - that authority is.
Either there is to be a single European air market, or there is not. If there is, then the EC may indeed have a role in determining the nature of the relations between that European Union (EU)market and the rest of the World. Yet one of Van Miert's central themes is that the BA-AA alliance be judged on the basis of its impact on UK-US competition, claiming that there is not yet evidence of a broad EU-US air market. If that is true, then by definition, there is no role for an EU body in trying to regulate that market.
Nevertheless the EC does have a duty to ensure that member states are interpreting and applying EU rules correctly. That is a very different role for the EC than one of seeking to apply those rules and laws itself. It is true that the EC could take a member government to the European Court over such issues - but only on the grounds that the member government has failed in its duty or obligations under European law. The mere fact that the EC competition commissioner does not like a development which takes place wholly within European law is not a valid ground for him to seek court action.
The EC competition commissioner's sudden interest in the BA/AA alliance is, in any event, a most curious development. Even accepting that appointments of commissioners are political - and therefore subject to irrational swings in policy - the competition department has, over the stewardship of the last couple of commissioners, steadfastly failed to involve itself in far more significant airline competition issues.
If the establishment of transatlantic alliances was an important issue for competition reasons, the time for the EC to act was obviously when the first significant alliance was establishing a precedent, not when the fourth or fifth such link was being proposed. The "opening of discussions" with KLM more than four years after it established the link with Northwest Airlines smacks more of desperate political window-dressing than of evidence of a serious and consistent concern over fair competition.
If protecting the interests of the travelling and taxpaying public is a legitimate interest of the competition commissioner, why Van Miert and his predecessors have been so silent over the consistent and flagrant abuses of state aid in artificially sustaining loss-making state-owned airlines which have done more to distort free and fair airline competition than has anything else in the last ten years?
If the competition commissioner wants to be taken seriously, he will have to do far better preparation than that which has led to his current ill-thought-out position. For a start, he needs to do his sums. If the BA/AA alliance is to yield up 168 slots a week as the price for approval - far less the 400 which the EC has vaguely mooted - how can competition be reduced? By definition, those slots will end up in the hands of rivals. Competitors have complained that these slots are likely to come from those now dedicated to BA's socially vital UK regional services, rather than at the expense of transatlantic flights, but that is not the point.
It is patently clear that the alliance will only proceed if the USA has achieved its goal of negotiating an open-skies agreement with the UK, in which case most of those slots yielded by the alliance will end up in the hands of transatlantic competitors. What share of the Europe-USA or UK-USA market will the alliance then have? Certainly not the share which the EC suggests.
That is not to say that the EC has got everything wrong in its current approach. On one issue, it has some right on its side - that of the ownership and trading of slots. Airport slots, wherever they are in the world, should not belong to airlines or be bought and sold by them. They should be owned outright by the airports concerned, and leased to the airlines which wish to use them, at the rate appropriate for each use. If the competition commissioner were to turn his efforts towards persuading his EC colleagues of the competition-enhancing merits of that , he might find that he has, after all, a true role.
Source: Flight International
