CityJet claims unfair tactics as business drops

Cityjet lost half its business class passengers within one week of Aer Lingus beginning to compete with it on the Dublin-London City Airport route.

Chief executive, Mr Pat Byrne, believes CityJet may have to pull out of the route by next summer because of the Aer Lingus move and accuses the semi-state airline of setting out to deliberately drive CityJet off it.

CityJet has complained to the Competition Authority about the development. A spokesman for the authority said it did not discuss particular cases. Each complaint is investigated and if evidence of breaches of competition law are discovered, a court case can be initiated, he said.

The airline has been flying to London City Airport since it was established in 1994. Since its incorporation CityJet has lost £17 million (€21.6 million) but its London route has been profitable in more recent times. It comprises 15 per cent of CityJet's business.

Aer Lingus moved onto the London City route on November 1st. "They are decimating our business," Mr Byrne said. "We are not against competition but we are against unfair competition.

"They have stolen half our business class traffic in a week and that doesn't just happen. This is a planned and concerted campaign to get the business to transfer."

Mr Byrne alleges that Aer Lingus is a "dominant player" on the Dublin-London route and as such is subject to competition law constraints which it has broken. He also said Aer Lingus has deliberately chosen flight times on the route which "shadow" his company's, to steal CityJet customers and force it to give up the route. "Aer Lingus deliberately applied to have all their flight times five minutes ahead of CityJet's," Mr Byrne said. "This is first degree murder."

He alleges the semi-state is breaking competition rules by way of the commission travel agents get from selling flights on the new Aer Lingus route, and the Aer Lingus tab points (bonus points which can be used against future ticket purchases) the customers clock up.

"By allowing the aggregation of business sold by travel agents on all routes for Aer Lingus to qualify for commission, CityJet is put at a disadvantage in obtaining bookings on the same route from the same agents. This is a predatory pricing action," he said.

"To have tab points allotted by Aer Lingus to passengers on their flights operating at the same time as the CityJet flights unduly influences choice and distorts competition."

An Aer Lingus spokesman denied the airline had broken competition rules and said the point made in relation to aggregate commission for travel agents applies in the case of any route where a larger and a smaller airline are in competition. It applies to the Dublin-New York route, where Aer Lingus competes with the much larger Delta Air Lines, he said. CityJet allows aggregate commission just like all other airlines, but it only has two routes.

The same point applies to the tab allegation, he said. "Tab points influence people, that's why they're there."

The spokesman said the London City route was for a focused market and that it would obviously be pushing the route among workers such as those in the IFSC. This was an obvious marketing move and not a campaign to put CityJet out of business. He rejected Mr Byrne's allegation regarding flight times and said Aer Lingus chose the flight times which most suited the customers it was trying to attract.

British Midland and Aer Lingus fly out of Dublin Airport for Heathrow at the same time. "CityJet should compete on product and service just like we do with British Midland," the Aer Lingus spokesman said.

Mr Richard Matthews, of Airport Co-ordination Ltd, the London company which acts as an agent for a number of UK airports regarding take-off and landing "slots", handled the Aer Lingus application to London City Airport.

He said the company applied for certain slots which, it emerged, would co-incide with new, earlier times CityJet had just applied for. "Once it was clear they both knew about each other's times, Aer Lingus made it clear it didn't want to be coming in later than CityJet." Mr Matthews decided it was best to have both arriving at the same time, "to level the playing field".

For the crucial first flight of the day, both Aer Lingus and CityJet arrive in London at 8.20 a.m. The Aer Lingus flight leaves Dublin at 7 a.m., five minutes earlier than the CityJet flight. Both companies operate four flights out of Dublin to London City Airport per day, Monday to Friday. The other three Aer Lingus flights are at: 11.05 a.m.; 15.30 p.m.; and 17.55 p.m.. The CityJet flights are at: 10.45 a.m.; 14.30 p.m.; and 18.10 p.m.

CityJet and Aer Lingus held talks earlier this year where they discussed working the route together, but could not come to any agreement.