In its ruling today, the Competition Appeal Tribunal has overturned a decision of the Competition Authority. No. 25/2013, on the allocation of slot times at Keflavik Airport. In the decision, the Competition Authority responded to a complaint from Wow Air and issued instructions to Isavia, which, on behalf of the Icelandic state, is responsible for the operation of Keflavik Airport, to ensure Wow Air has access to competitively important ground handling slots for aircraft at the airport. It was concluded that the current system for allocating ground handling slots had resulted in Icelandair, the largest competitor, having priority for almost all of the most important slots at the airport. This would seriously distort competition for flights to and from the country.
The Competition Authority issued its instructions to Isavia. The decision of the appeals board is based on the assumption that a Danish party, Frank Holton, whom Isavia's predecessor appointed to be the coordinator for the allocation of air traffic handling slots, exercises independent administrative authority under Icelandic law, and that Isavia is therefore precluded from any interference with his allocation of handling slots at Keflavik Airport. Contractual provisions that Isavia can dismiss the coordinator at any time and that the coordinator cannot under any circumstances be held liable for complaints concerning his duties under the contract, do not alter this, in the opinion of the appeals board.
The appeal board's ruling does not take a substantive position on the competitive conditions at Keflavik Airport, which were the basis for the original decision. The appeal committee's ruling does not take a substantive position on the competitive conditions at Keflavik Airport, which were the basis for the initial decision. The allocation arrangement therefore severely limited the ability of other airlines to compete with Icelandair and thus harmed competition in this important area. The allocation system has therefore severely limited the ability of other airlines to compete with Icelandair and has thus harmed competition in the important area of passenger flights to and from the country.
The Competition Authority is now considering how to respond to the aforementioned ruling of the Competition Appeals Board. In this regard, it is being considered, among other things, to initiate a new case against the Danish Conciliation Director, in light of the Competition Appeals Board's recent conclusion that he holds independent administrative authority in this area under Icelandic law. It is also under consideration to refer the decision to the courts.
Before the Competition Authority decides on a response to the ruling, it will seek the views of the parties to the case, namely Isavia, Wow Air and Icelandair. Furthermore, the Authority will seek the views of the Ministry of the Interior. In this regard, it should be noted that the aviation authorities have not complied with the Competition Authority's recommendations since 2008 to change the allocation rules at the airport. Had this been done, it would have been possible to improve the competitive conditions for flights to and from the country and avoid the aforementioned legal proceedings.
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