The Office of Fair Trading ('OFT') has concluded that it has no grounds to take action against low cost airline Flybe over alleged predatory behaviour.
In 2009 Air Southwest called on the OFT to investigate whether Flybe's entry on to the Newquay to London Gatwick route in competition with Air Southwest amounted to predation in breach of Article 102 and/or the Chapter II prohibition. It was alleged that Flybe's entry was intended to drive Air Southwest out of either the Plymouth to Newquay to London Gatwick route or eliminate Air Southwest as a competitor at Plymouth Airport more widely.
Having assessed the evidence, the OFT considers that it does not have sufficient evidence to proceed against Flybe and has issued a 'No Grounds for Action' decision. In particular:
- the OFT considers that Flybe is not dominant on a relevant market covering the Newquay to London Gatwick route, and is only dominant on two small scale markets at Exeter Airport;
- there appear to be limited links between these two small scale markets and the Newquay to London Gatwick market and the links may not be sufficiently close to support a finding of related-market abuse;
- there is an absence of evidence that Flybe's entry on to the Newquay to London Gatwick route was anything other than normal (albeit robust) competition in the particular circumstances of this case; and
- there is an absence of sufficient evidence that Flybe's intentions were predatory and not part of a normal robust competitive strategy.
A decision setting out the OFT's full reasoning is to be published in around four weeks.
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