DARWIN ALLEGES ANTI COMPETITIVE BEHAVIOUR BY SWISS

The Swiss-based regional carrier Darwin Airline has lodged a formal complaint with Switzerland’s Competition Commission (COMCO), alleging abusive and anti-competitive behaviour by Swiss International Air Lines (SWISS).

Early 2014, DARWIN announced that it had concluded an agreement through which Etihad Airways would acquire a 33,3 percent stake in DARWIN, subject to regulatory approval. Under a commercial agreement with Etihad Airways, the national carrier of the United Arab Emirates, DARWIN was rebranded as Etihad Regional and adopted a new livery for its fleet.

In its complaint to the competition commission, DARWIN has alleged that SWISS responded to the Darwin-Etihad agreement by engaging in a series of abusive actions aimed at forcing DARWIN out of the Swiss market.

These actions have included:
Terminating, with no valid reason, the wet lease by SWISS of DARWIN aircraft, which DARWIN operated on behalf of SWISS on the Zurich-Lugano route for a period of almost 10 years;

Replacing the wet lease DARWIN aircraft with larger aircraft from Tyrolean Airways, a wholly-owned subsidiary of Austrian Airlines using non-Swiss aircraft on Swiss domestic routes;

Terminations of a standard IATA (International Air Transport Association) interline agreement between DARWIN and SWISS. This agreement enables passengers and their baggage to connect between airlines. The termination of this agreement has increased the burden on DARWIN passengers who are connecting to or from SWISS flights;

Cancellation of an agreement for accommodating DARWIN passengers in the event of flight disruptions. This again increases the burden on passengers in the event of a flight disruption;

Targeting the DARWIN route network and launching new routes replicating those of DARWIN, many of which previously had not been operated by SWISS;
DARWIN is a fraction of the size of SWISS, serving just 28 destinations in Europe with a fleet of 12 aircraft – eight 50-seat Saab 2000s and four 68-seat ATR72s. Last year, the airline carried just under half a million passengers on a total of 16,426 flights.

By comparison, SWISS operates 90 aircraft to more than 80 destinations worldwide. In 2013, it carried just under 16 million passengers, or almost 35 times the DARWIN uplift, on more than 146,000 flights.

The Chief Executive Officer of Darwin Airline, Maurizio Merlo, said SWISS was going to extraordinary lengths to put pressure on Darwin on routes where it is known that current seat capacity cannot be filled.

Mr Merlo said: “We are strong believers in fair competition and we cannot accept to be driven out of the market through predatory measures which are clearly adopted as an attempt to weaken and damage our company rather than to fulfill the commercial logic of our competitor. We believe that these actions deserve to be examined in more detail by the Swiss Competition Authority.”

Darwin Airline