The European Commissionaims to close the legal loophole that allowed Italian flag carrier Alitalia to demand that rivals match its fares on stopover flights, writes Jeremy Slater.
The EC admits the recent complaint by British Airways and Lufthansa over Alitalia's demand for a hike in its rivals' fares on flights between Rome and New York falls into a loophole in the legislative arsenal intended to promote competition. The EC says it will investigate the complaints from BA and the German flag carrier, which charge less than their Italian rival because their flights hub through London or Frankfurt. However, the EC adds that, because the flights end in the USA, it has no legal basis for preventing the Italian airline's demands. "The Commission cannot get involved in bilateral agreements," says the EC.
However, a senior source within the EC says that with the arrival of new commissioners Neelie Kroes (competition) and Jacques Barrot (transport) in November, it will begin working on legislation to close this loophole.
"The Commission was going to warn Alitalia about this case," says the source. "The present transport commissioner Loyola de Palacio and Jacques Barrot think along the same lines on the issue and intend to ensure that liberalisation of the internal market is improved.
"We have reformed the air market before and won our cases in the Court of Justice when our position was questioned by the airline business and national governments, so we are not afraid of introducing new legislation," adds the source.
Brussels observers say that a proposal for a new directive in this area could take around two years to produce and then a further two to three years to ratify.
The Commission recently approved an emergency state-guaranteed g400 million ($492 million) loan for Alitalia.
Source: Flight International
