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Competition Policy and International Airport Services, 1997

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Competition Policy and International Airport Services, 1997 Competition Policy and International Airport Services 1997 The OECD Competition Committee debated competition policy and international airport services in June 1997. This document includes an executive summary, an analytical note by the OECD staff and written submissions from Australia, Austria, Canada, the European Commission, Germany, Hungary, Italy, Japan, Korea, Norway, Poland, Sweden, Switzerland, the United Kingdom, the United States and BIAC, as well as an aide-memoire of the discussion. Although airlines have long sought to enter alliances, an important new development in the last decade has been the crystallization of international airline alliances around major airline groupings. The scope and nature of these alliances differ, but there is a tendency towards deeper alliances involving co-operation on all aspects of the airline business. These super-alliances are coming as close to actual mergers as aviation’s Byzantine regulations allow, raising fundamental questions for competition policy-makers and enforcers. Alliances have the potential both to enhance the level and quality of services offered to consumers and to significantly restrict competition. Why do airlines seek to enter such alliances? What are the benefits to the airlines or consumers? How do alliances restrict competition? What is the role played by frequent-flyer programmes and other loyalty schemes? What remedies should competition authorities consider to alleviate the harmful effects of alliances? What is the appropriate role for international co-operation between authorities? Structural Reform in the Rail Industry (2005) Competition Issues in Road Transport (2000) Competition in Local Services (2000) Airlines Mergers and Alliances (1999) Promoting Competition in Postal Services (1999) Unclassified DAFFE/CLP(98)3 Organisation de Coopération et de Développement Economiques OLIS : 07-May-1998 Organisation for Economic Co-operation and Development Dist. : 14-May-1998 __________________________________________________________________________________________ English text only Unclassified DAFFE/CLP(98)3 DIRECTORATE FOR FINANCIAL, FISCAL AND ENTERPRISE AFFAIRS COMMITTEE ON COMPETITION LAW AND POLICY COMPETITION POLICY AND INTERNATIONAL AIRPORT SERVICES English text English only 65240 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DAFFE/CLP(98)3 FOREWORD This document comprises proceedings in the original languages of a Roundtable on Competition Issues in the Allocation of Airport Take-Off, Landing Slots and Ground Handling Services which was held by the Working Party n°2 of the Committee on Competition Law and Policy in June 1997. This compilation which is one of several published in a series named “Competition Policy Roundtables” is issued to bring information on this topic to the attention of a wider audience. PRÉFACE Ce document rassemble la documentation dans la langue d’origine dans laquelle elle a été soumise, relative à une table ronde sur les problèmes de concurrence dans l'attribution des créneaux horaires de décollage et d'atterissage et concernant les services au sol aéroportuaires. Cette table ronde s’est tenue en juin 1997 dans le cadre du Groupe de travail n° 2 du Comité du droit et de la politique de la concurrence. Cette compilation qui fait partie de la série intitulée “les tables rondes sur la politique de la concurrence” est diffusée pour porter à la connaissance d’un large public, les éléments d’information qui ont été réunis à cette occasion. Visit our Internet Site -- Consultez notre site Internet http://www.oecd.org/daf/ccp OECD 1998 2 DAFFE/CLP(98)3 OTHER TITLES SERIES ROUNDTABLES ON COMPETITION POLICY 1. Competition Policy and Environment (Roundtable in May 1995, published in 1996) OCDE/GD(96)22 2. Failing Firm Defence (Roundtable in May 1995, published in 1996) OCDE/GD(96)23 3. Competition Policy and Film Distribution (Roundtable in November 1995, published in 1996) OCDE/GD(96)60 4. Competition Policy and Efficiency Claims in Horizontal Agreements (Roundtable in November 1995, published in 1996) OCDE/GD(96)65 5. The Essential Facilities Concept (Roundtable in February 1996, published in 1996) OCDE/GD(96)113 6. Competition in Telecommunications (Roundtable in November 1995, published in 1996) OCDE/GD(96)114 7. The Reform of International Satellite Organisations (Roundtable in November 1995, published in 1996) OCDE/GD(96)123 8. Abuse of Dominance and Monopolisation (Roundtable in February 1996, published in 1996) OCDE/GD(96)131 9. Application of Competition Policy to High Tech Markets (Roundtable in April 1996, published in 1997) OCDE/GD(97)44 10. General Cartel Bans: Criteria for Exemption for Small and Medium-sized Enterprises (Roundtable in April 1996, published in 1997) OCDE/GD(97)53 11. Competition Issues related to Sports (Roundtable in October 1996, published in 1997) OCDE/GD(97)128 12. Application of Competition Policy to the Electricity Sector OCDE/GD(97)132 (Roundtable in October 1996, published in 1997) 13. Judicial Enforcement of Competition Law OCDE/GD(97)200 (Roundtable in October 1996, published in 1997) 3 DAFFE/CLP(98)3 14. Resale Price Maintenance (Roundtable in February 1997, published in 1997) OCDE/GD(97)229 15. Railways: Structure, Regulation and Competition Policy (Roundtable in October 1997, published in 1998) DAFFE/CLP(98)1 Available on our Web Site -- Disponible sur notre site Internet http://www.oecd.org/daf/ccp 4 DAFFE/CLP(98)3 TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................................................7 SYNTHESE..............................................................................................................................................13 NATIONAL CONTRIBUTIONS Australia ....................................................................................................................................21 Austria.......................................................................................................................................35 Canada.......................................................................................................................................37 Espagne .....................................................................................................................................45 Germany....................................................................................................................................53 Hungary.....................................................................................................................................57 Italy ...........................................................................................................................................59 Japan..........................................................................................................................................67 Korea.........................................................................................................................................77 Norway......................................................................................................................................81 Poland........................................................................................................................................91 Sweden ......................................................................................................................................95 Switzerland..............................................................................................................................105 United Kingdom......................................................................................................................109 United States ...........................................................................................................................119 European Commission ............................................................................................................133 James F. Rill, Business and Industry Advisory Committee (BIAC) ......................................141 AIDE-MEMOIRE OF THE DISCUSSION...........................................................................................153 AIDE-MEMOIRE DE LA DISCUSSION .............................................................................................173 5 DAFFE/CLP(98)3 6 DAFFE/CLP(98)3 EXECUTIVE SUMMARY Looking back over the discussion and the country submissions, the following points emerge: • Regulatory concern over airports (and therefore of slots) stems from a lack of inter-airport competition at many major cities. Restrictions on inter-airport competition should be eliminated. The provision of air services between any two given cities requires two complementary inputs in fixed proportions - aircraft services (flights) and airport services (including take-offs, landings and ground-handling services). As a result, if there is to be effective competition (in the absence of government intervention) in the market for air transport services, there must be adequate competition in both of these markets.1 For example, if there is limited competition between airlines, enhancing competition between airports (or regulatory controls on airport market power) alone will not reduce the prices faced by consumers, as the market power that was previously exercised by the airports will simply be transferred to the airlines. Similarly, if there is
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