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12.3.

98 EN Official Journal of the European Communities C 77/5

Notice pursuant to Article 5(2) of Council Regulation (EEC) No 3975/87 concerning case
IV/36.563 — IATA Cargo Tariff Conference

(98/C 77/04)
(Text with EEA relevance)

I. Application lodged by IATA III. Reasons for negative clearance put forward by IATA

On 30 June 1997, the International Air Transport IATA considers that the agreement on tariff consul-
Association (IATA) submitted an application for a tations does not have the object or effect of
negative clearance and for a decision pursuant to restricting competition.
Article 85(3) of the EC Treaty and/or Article 53 of
the EEA Agreement in case the Commission does
not grant a negative clearance. This application
refers to resolutions and provisions providing the
According to IATA, the purpose of the tariff consul-
framework for cargo tariff consultations amongst
tations is only to provide the economic basis for an
IATA members, and between IATA and non-IATA
effective multilateral interlining system. As regards
carriers that choose to participate in these consul-
Article 85, IATA considers that the crucial test does
tations in respect of cargo tariffs within the EEA.
not relate to the purpose of the resolutions in
question but only to whether they have a restrictive
effect. In this context, it should be noted that
although the IATA resolutions set out the terms and
II. Main provisions of the agreement conditions for providing an interline product, these
terms and conditions do not restrict competition
between individual airlines in providing such
The resolution package notified to the Commission products, since by definition an interline product is
contains both the rules for the conduct of one that no single airline can provide on its own.
conferences, and the currently applicable cargo rates
and their conditions. Where the airlines attending a
conference agree on a change, that change is
reflected in a resolution passed by the conference. Moreover according to IATA, the lack of corre-
The effect of such a resolution is to amend the rate lation between market prices and the IATA cargo
structure which is itself the cumulative effect of tariffs can be explained by the very competitive
previous resolutions adopted by IATA cargo nature of the EEA cargo market and the fact that
conferences. the IATA cargo tariffs only relate to those interlined
segments of a given route, leaving the contracting
carrier free in its pricing decisions relating to the
route as a whole and its pricing decisions for on-line
According to IATA, amongst other things, in order services in general. IATA multilateral cargo tariff
to reduce the difference between market and official consultations have also an inherent net positive
IATA consulted rates, in January 1997, with effect effect on competition by enabling carriers, especially
from 1 July 1997, IATA amended the applicable smaller, regional and peripheral ones, to compete in
cargo rates for transport between points in the EEA the market for cargo services and by facilitating
by introducing a single per kilogram rate reflecting market entry.
existing market conditions. This system applies for
all categories of transport.

Consequently, IATA considers that cargo tariff


consultations cannot be regarded as restrictive for
Nevertheless, IATA said that it is willing to consider
purposes of Article 85.
a limitation, for example a 250Økg weight cap,
beyond which no tariff consultations will take place.
According to IATA, these shipments account for
more than 80Ø% of the shipments currently
interlined. IV. Reasons for exemption put forward by IATA

In any event, all consultations on rates charged to IATA considers that multilateral cargo tariff consul-
the shippers within the EEA are expressly specified tations contribute to improving distribution and
as non-binding. promoting economic progress, because they provide
C 77/6 EN Official Journal of the European Communities 12.3.98

the best and most efficient basis for transporting air because without these consultations, shippers,
cargo through the use of interlining. smaller carriers and consumers will not obtain the
full extent of the above mentioned benefits. The
abolition of multilateral consultations would
According to IATA, tariff consultations make eliminate the first available-carrier rule, raise trans-
possible the provision of an efficient and speedy action costs for carriers by requiring individual
interlining service because the agreed tariff provides negotiations and rate setting with each bilateral
the bases against which the prorated amount paid by partner, and make interlining impossible on routes
the contracting carrier to the receiving carrier where no bilateral arrangements apply.
providing the transport services on subsequent or
prior segments is calculated. According to IATA, the EEA air cargo market is
highly competitive and tariff consultations have no
adverse impact on competitive conditions in the EEA
The IATA cargo resolutions also reduce the trans- air cargo market since actual tariffs charged to
action costs that would otherwise be associated with customers have tended to be considerably lower than
interlining on either an ad hoc or bilateral airline to interlineable tariffs.
airline basis and thus make possible the provision of
interlined services at a lower cost to consumers.
Consequently, the Arrangements would not
eliminate competition in respect of a substantial part
of the services concerned. By facilitating interlining,
These resolutions make it possible to preserve a the Arrangements would enable carriers, especially
more competitive structure of supply by enabling smaller, regional and peripheral ones to play a role
smaller airlines and peripheral airlines that cannot on the market, thus making that market more
match the on-line system of the large airlines to competitive.
offer a cargo product to destinations on an interline
basis.
Conclusion

Consumers benefit from lower prices made possible This notice is published pursuant to the procedure estab-
by the avoidance of transaction costs, and from a lished by Article 5(2) of Council Regulation No
greater choice of suppliers and the competition 3975/87.
between them. Consumers also benefit from the
provision of a comprehensive service that would not
The Commission has not, at this stage, taken a position
be possible on a bilateral basis.
as to the applicability of Article 85(3).

According to IATA, these benefits of tariff consul- The Commission invites all Member States and
tations, in allowing an efficient interline system, interested third parties to submit any comments they may
outweigh any theoretical restrictive effects of the have within 30 days from the date of publication of this
arrangements. Moreover, IATA is willing to notice quoting reference IV/36.563 to the following
consider limiting tariff consultations to relatively address:
small shipments.
European Commission,
DG IV/D/2,
IATA considers that the multilateral consultations Rue de la Loi/Wetstraat 200,
on interlineable cargo tariffs are indispensable, B-1049 Brussels.