Julian Moxon/PARIS
THE EUROPEAN Commission (EC) is considering mounting an enquiry into excessive pricing on fully flexible business-class tickets in Europe.
Transport commissioner Neil Kinnock says that an EC analysis has shown that such fares are often "significantly higher than costs", and may contravene EC rules on excessive pricing and abuse of market dominance.
Kinnock also told the Warburg's European Transport conference in London on 16 September that the liberalisation process in Europe will be completed in six months - but adds that it has produced totally different effects in Europe from those experienced in the USA after deregulation in the 1980s.
"There has been no dramatic decrease in fares, no spectacular disappearance of major carriers, and no substantial penetration of traditional domestic markets by foreign competitors", he says.
In contrast to the US experience, the number of routes has increased, by 6%, since the beginning of liberalisation in 1993. Forty per cent, of these are now served by two or more operators and a "significant number" now have two instead of one. Eighty new airlines have started up, but 60 have closed. "That failure rate is part of the reason for the lack of pressure on the established carriers," he says.
The slow advance of liberalisation in Europe means that passengers have yet to feel its full effects, says Kinnock. Fares have fallen overall by only 5% since 1990, "-and passengers are not yet benefiting fully from greater choice or quality of service". He applauds the efforts of new low-cost entrants such as Virgin Express Europe, Air Libert, and easyJet. "I hope their enterprise takes them beyond niche markets," he says.
Kinnock promises to keep up the battle against state subsidies for ailing airlines, abuse of market power by dominant national carriers and anti-competitive use of airport functions such as slots and computer-reservation systems.
Source: Flight International
