Fines of 14.5 million euros, which reflect “particularly serious” facts: Air Caraibes adn the former parent company of Air Antilles were reported on Wednesday by the Competition Authority for having agreed the prices of short-haul connections. In this decision published at a time when the overseas territories are the scene of claims against the high cost of living, the Authority states that this coordination between the airlines that share the regional flight market has allowed them to “increase the average price of tickets sold.
Air Caraibes (Dubreuil group) was the most sanctioned (13 million euros), for these facts dating back to the period 2015-2019, the Competition Authority specified in a press release, also noting a fine of 1.5 million euros paid by K Finance, at the time the parent company of Air Antilles. In the same case the consultancy company miles Plus (Aerogestion) was fined 70,000 euros.
According to the Authority, “the companies involved implemented three agreements on the prices and tariff conditions of air connections between the French and international Caribbean islands” between 2015 and 2019. Specifically,these were the connections between “Pointe- à-Pitre and fort-de-France,as well as those between each of these two cities and Saint-Martin,Sainte-Lucie and Santo Domingo”,he said. underlines.
“Between February and june 2015, then again between September and December 2016, Air Antilles and Air Caraibes, with the support of Aérogestion, discussed their future pricing intentions and made mutual commitments on the pricing conditions of airline tickets,” according to the same source. “Then, between April 2017 and December 2019, the companies involved participated in a third agreement on setting prices and tariff conditions”, all within the framework of a “non-aggression agreement”.
“Exorbitant prices”
“The anti-competitive practices implemented by Air Antilles and Air caraibes are particularly serious”, judged the Competition Authority, noting that “the inhabitants of these territories, faced with a substantially higher cost of living than in metropolises, they have no truly viable alternative to flying” and have been placed “in a captive customer position” by the duopoly.
“We suspected this behavior given the exorbitant prices”,reacted the deputy (Liot) of Guadeloupe Olivier Serva.“It was almost the most expensive line in the world (Martinique-Guadeloupe) in relation to the number of kilometers to travel,” he said, expressing his “satisfaction at seeing these violators sanctioned.” ”This behavior to the detriment of the consumer is serious and I hope that competition opens up and that practices are adopted that allow them to have reasonable prices,” he concluded.
“Air Caraibes takes note of the Competition Authority’s decision published today which refers to old facts relating onyl to the western India regional network,” the company said in a press release.
“we are analyzing this decision with our consultancy to consider possible subsequent actions,” added the airline,which also operates long-haul flights to the metropolis. From a source close to the matter, the company had set aside the maximum amount associated with a fine from the Authority in the 2023 budget. It decided not to impose a direct fine on Air Antilles, which was not solvent because it had recently been liquidated. It is indeed thus its former parent company, K Finance, that is hit by the fine.
The CAIRE group,the corporate name of Air Antilles,was partially taken over in 2023 by a holding of the Edeis airport group,allied with the community of Saint-Martin,allowing the relaunch of Air Antilles flights in July 2024. This story finds its epilogue in a tense context for overseas communities,particularly in Martinique where a movement against the high cost of living began on 1 September,degenerating into urban riots and violence.
What are the consequences for airlines found guilty of price-fixing in the aviation industry?
Interview between Time.news Editor and Competition law Expert
Editor: Good day, and welcome to Time.news. Today, we’re discussing a recent ruling by the Competition Authority that imposed hefty fines on Air Caraibes and its former parent company, Air Antilles, for price-fixing in short-haul flights. Joining us is Dr.Emily Carter, an expert in competition law and airline industry regulations. Thank you for being here, Dr. Carter.
Dr. Carter: thank you for having me! It’s a pleasure to be here.
Editor: Let’s dive right in. The recent fines amount to €14.5 million, with Air Caraibes bearing the brunt of that at €13 million. Can you explain why such a important penalty was imposed?
Dr. Carter: Absolutely. The Competition Authority classifies the coordination of prices between these airlines as “notably serious” conduct. This essentially means they conspired to set higher ticket prices, which violates competition laws designed to protect consumers from unfair practices. By doing so, they limited market competition, resulting in inflated ticket prices for passengers.
Editor: That’s alarming for travelers. This ruling emerged during a time when residents in overseas territories are already expressing frustration over the high cost of living. What impact do you think this fine will have on consumers and the airline industry as a whole?
Dr. Carter: It’s definitely a critical moment. For consumers in these regions who are facing financial strain, the higher prices resulting from this price-fixing agreement are particularly burdensome. The fine serves not only as a punishment for these airlines but also as a warning to others in the industry. It encourages a healthier competitive habitat were consumers can benefit from fair pricing. Over time, we could see a shift in how airlines operate to avoid similar repercussions.
Editor: It’s quite fascinating to note that this misconduct took place between 2015 and 2019. Why do you think it took so long for these violations to be addressed?
Dr. Carter: Investigations into anti-competitive behaviour can frequently enough be lengthy. The authority must gather sufficient evidence to substantiate any claims of collusion before they can impose fines. Additionally, the airline industry is complex, with various players and interests involved, which can further complicate investigations. So, while the timeframe might seem prolonged, it’s not unusual in such cases.
Editor: You mentioned that K Finance, the former parent company of Air Antilles, and a consultancy company, Miles Plus, were also fined. Can you elaborate on the role of these companies in this case?
Dr. Carter: Certainly. K Finance’s fine of €1.5 million suggests it played a crucial role in facilitating or endorsing the price-fixing agreement. Likewise, the consultancy, miles Plus, was fined €70,000, indicating it may have provided advice or services that supported this collusion.This broadens the scope of responsibility in the industry, showing that various players, not just the airlines, can influence anti-competitive practices.
Editor: With such serious implications for price-fixing,what steps can airlines take to ensure compliance with competition laws and avoid fines in the future?
Dr. Carter: Airlines need to invest in robust compliance programs that promote a culture of openness and accountability. This includes training staff on competition laws, implementing whistleblower systems, and maintaining clear communication with regulatory bodies.Regular audits can also help ensure that pricing strategies remain competitive and lawful.
Editor: Thank you, Dr. Carter, for shedding light on this critically important issue. Is there anything else you would like to add before we conclude our discussion?
Dr. Carter: I’d just like to emphasize the importance of consumer awareness and the role of regulatory bodies in maintaining fair markets. When consumers are informed and engaged, they can help ensure that companies prioritize fair practices.
Editor: Well said! Thank you again for your insights, Dr. Carter. This has been an eye-opening discussion about the state of the airline industry and the importance of competition laws. We appreciate your time!
Dr. Carter: Thank you! It was a pleasure to be here.
