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Exclusive Deals Btw Airlines And Airports Allowed?  
User currently offlineVinnieWinnie From United States of America, joined Nov 2005, 803 posts, RR: 0
Posted (6 years 11 months 3 weeks 3 days 8 hours ago) and read 3600 times:

I was wondering whether airlines are allowed to sign deals with an airport for the exclusive rights to serve a certain city-pair from an airport...

I know there are some anti-trust issues both in the EU and in the US for EU and US airlines nevertheless does the same apply for "foreign" carriers? (ie carriers from outside the EU)

Let me give an example which led me to ask this question: Etihad serves BRU about 4 times a week. Because it feared that competition would ruin its yields, it asked BRU airport to sign a contract stating that for 5 years Etihad would be the only carrier flying between BRU and the middle east. Is this scenario possible? Would that explain why Emirates hasn't entered Belgium whereas in Greece it has?

Thanks for your answers  

Difficult to create a sensible topic title when asking a question!

[Edited 2008-01-06 12:22:22]

4 replies: All unread, jump to last
 
User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 1, posted (6 years 11 months 3 weeks 3 days 7 hours ago) and read 3568 times:

The 'deal' you suggest in your example probably couldn't happen. Route rights are exchanged between Governments - Belgium would already have agreements in place with a number of other Middle East countries. RJ MS SV etc. couldn't be prevented by Brussels airport from operating (except if/where capacity is limited - and slots could still be traded (and sold) in these circumstances.)

In any case such an agreement would likely be ruled anti-competitive by the European Competition directorate and thus unenforceable. They have already ruled that 'exclusive' agreements (such as FR at Charleroi) are not permitted - the same terms must be available to all airlines seeking to operate there.

More subtle arrangements are indeed possible (and likely), such as unpublished rebates to choice companies. But the right of operations are not in an airports control.


User currently offlineTrvlr From United States of America, joined Feb 2000, 4430 posts, RR: 21
Reply 2, posted (6 years 11 months 3 weeks 3 days 7 hours ago) and read 3543 times:

Almost all commercial airports in the US receive a fair amount of government funding. I'm sure that funding would be in danger if an airport signed an "exclusive deal" with a carrier.

User currently offlineECONOMICS From , joined Dec 1969, posts, RR:
Reply 3, posted (6 years 11 months 3 weeks 3 days 6 hours ago) and read 3493 times:



Quoting ANother (Reply 1):
In any case such an agreement would likely be ruled anti-competitive by the European Competition directorate and thus unenforceable. They have already ruled that 'exclusive' agreements (such as FR at Charleroi) are not permitted - the same terms must be available to all airlines seeking to operate there.

I thought FR had challenged this? If so & they lost there are other ways around it, which I'm sure FR would have found. The whole European Parliment seems a bit of an expensive joke to an outsider.

Of course airports can sign incentive deals which can be confidential, especially if they are trying to attract an airline(any airline) to fly a unflown route.


User currently offlineANother From , joined Dec 1969, posts, RR:
Reply 4, posted (6 years 11 months 3 weeks 2 days 21 hours ago) and read 3425 times:



Quoting ECONOMICS (Reply 3):
Of course airports can sign incentive deals which can be confidential, especially if they are trying to attract an airline(any airline) to fly a unflown route.

Don't disagree - subject to local law of course, but the OP's question related to exclusivity agreements - that would be much more difficult to achieve.


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