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Italy’s antitrust authority orders Alitalia to reduce their Milan-Rome service within 90 days.
Italy’s antitrust authority, Garante per la Concorrenza (GplC), yesterday ordered Alitalia, together with its AirOne unit, to surrender some of the time slots which they hold for flights between Rome Fiumicino and Milan Linate airports. Alitalia has 90 days to fulfill the demand. This means that by the 28th of October 2012, they must have completed the reduction of flights.
The investigation by the authority, which commenced last November, found Alitalia-AirOne guilty of running a monopoly on the Rome-Milan route. The Italian airline company will have 3 months to submit their proposed corrective measures.
Although no concrete figure has been given as to how many slots must be surrendered, the GplC said that the airline will have to make enough reductions as to allow for “effective competition” during the early morning and the late evening.
The Italian authority rejected the argument that Alitalia already suffers substantial competitive pressure on the Rome-Milan route from the high-speed train link provided by the Italian rail company Ferrovie dello Stato. The chief executive of Alitalia, Andrea Ragnetti disputed this conclusion, pointing to a number of statistics such as that since the arrival of the high-speed train, Alitalia has lost 2 million passengers and 50% of revenues on that route despite a price drop of 20%. Ragnetti stated, “The fact that the high speed train is a direct competitor of the airlines for Rome-Milan is clear for all Italians to see”.
Clearly not in agreement with GplC, Alitalia have announced that they will appeal the ruling. If their appeal is unsuccessful, Alitalia will have to prepare themselves to relinquish of their slots on the Rome-Milan route. Easy Jet and Air Dolomiti (under Lufthansa) have both already expressed their intention to bid for the freed slots.
Avv. Gabriele Giambrone commented, “Anti-trust cases are always received with great interest as they often involve big brands. Companies have to be careful not to hold an unfair competitive advantage lest they be punished, as is happening with Alitalia now. In fact, Alitalia is currently being investigated by European regulators for a cooperation deal between them, Delta and Air France-KLM. Two such high profile cases for Alitalia could be severely detrimental to their company.”
Iain James Buchan
Avv. Gabriele Giambrone
Giambrone Law ILP
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