Newsletter
UNCONDITIONAL TRANSFER OF AIRLINE TICKETS IS CONCERTED ACTION
The FTC recently determined that two airlines, by unconditionally endorsing and transferring each other's tickets on their Taipei-Kaohsiung, Taipei-Tainan and Taipei-Chiayi routes, violated Article 14 of the FTL, which prohibits concerted action in restraint of competition. The FTC re-quired the two airlines to end the practice im-mediately, and imposed fines on them.
The FTC states that the two airlines' action in practicing unconditional ticket transfer on the above routes, by which each was required to al-low passengers holding tickets of the other air-line to travel on its own flights without restric-tion, constituted a mutual restraint of business activity. Such an agreement was equivalent to one ticket giving entitlement to travel on both's services, and thus had the effect of creating joint transport operations between the two airlines. Further, the revenue sharing agreement con-tained in their joint transport contract might eas-ily lead to the imposition of minimum price lim-its. This would enable inefficient operators to remain in the market, and would impair the functioning of the market competition mecha-nism; it should therefore be prohibited.