The Competition Authority on Friday approved a collaboration between the coach companies Kynnisferðir ehf. and Airport Direct ehf. which aims at the temporary joint use of the companies' vehicle fleet on the scheduled route between Leif Erikson Airport and the capital region. The exemption is intended to allow the companies to respond to the unprecedented situation caused by the COVID-19 pandemic.-19, as the transport of airline passengers to and from Keflavik Airport is, in the opinion of the Competition Authority, a crucial part of transport to and from the country and is therefore significant for the reconstruction of the tourism industry here in Iceland once the current COVID-19 situation has passed.
The collaboration is subject to the condition that all communications between the companies are limited to the objectives of the collaboration. Tourism Board shall be given the opportunity to participate in all communications relating to the collaboration, the purpose of which is to ensure that Tourism Board can gain an overview of the actions taken by competitors in the market in this regard.
In the design and implementation of the cooperation, care must be taken to ensure that there is no price coordination between partners in any way. Furthermore, it is a prerequisite of the collaboration that the partners manage their own marketing and sell journeys on the scheduled route independently, i.e. through their own sales channels. The collaboration shall therefore consist solely of jointly using the companies' coach services on the scheduled route during the exemption period.
In granting the exemption in this case, it was of particular significance that Kynnisferðir and Airport Direct are under an obligation, based on contractual commitments with Isavia, to operate scheduled services to and from the airport in connection with all arrivals and departures of scheduled and charter flights at Keflavik Airport. Other coach operators have provided on-demand transport to and from the airport from so-called remote locations, but the aforementioned obligation to provide this service does not apply to those companies. It was also noted that the Competition Authority has previously made observations and issued recommendations to Isavia regarding the way the company conducted the tenders that form the basis of the current contracts. Isavia has responded to those recommendations and stated that it is prepared to cooperate with the Competition Authority on the drafting of tender conditions for facilities at the airport. Isavia's willingness to review the current arrangement was therefore relevant when assessing the pending exemption request.
The derogation is granted for a short period, until 31 December 2020. However, no later than 31 August 2020, the need for the cooperation shall be reassessed in light of the circumstances, for example with regard to the number of flights to and from the country.
The decision is accessible here.
In recent weeks, the Competition Authority has granted exemptions to businesses to respond to problems arising from COVID-19. Further information can be found on the Authority's information page. here.
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