Competition tribunal to hear case on airline food starting in October - NEWS 95.7
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Competition tribunal to hear case on airline food starting in October

Last Updated Sep 18, 2018 at 6:40 pm ADT

A Westjet Boeing 737-800, left, taxis past an Air Canada Rouge Airbus A319 at Vancouver International Airport in Richmond, B.C., on Monday, April 28, 2014. The federal Competition Tribunal has set a date for hearings between the Vancouver Airport Authority and the Competition Bureau, which has accused the airport operator of imposing restrictions it says decrease competition among in-flight catering companies. THE CANADIAN PRESS/Darryl Dyck

VANCOUVER – The federal Competition Tribunal has set a date for hearings between the Vancouver Airport Authority and Canada’s competition watchdog, which has accused the airport operator of stifling competition among in-flight catering companies.

In a case launched in 2016, the competition commissioner argued the airport authority — which is responsible for the management and operation of Vancouver International Airport — had exploited its market position by denying new airplane catering suppliers access to the airport, resulting in higher prices and worse service.

The commissioner has asked the Competition Tribunal for an order requiring the airport authority to open Vancouver International Airport to greater competition.

The airport authority has told the quasi-judicial body it aims to foster competition but also has limited influence on the airline food market.

“In addition, to the best of the authority’s knowledge, the demand for catering and related services at the airport is not sufficient to support additional entry at this time,” it said in court documents.

The airport had two full-service caterers in 2016. Following a market study, the authority licensed a third, which is scheduled to start operations “in the near future,” the authority said in an email Tuesday.

“The airport authority will vigorously defend its right to determine how services are provided at YVR,” said vice-president Argiro Kotsalis in a statement.

Airlines generally select their catering providers, but the Vancouver authority determines which companies can access the “airside,” the area past the security perimeter where suppliers must enter to provide services. For an in-flight caterer, no airside access can effectively bar airport operations.

In court filings, the commissioner said the airport authority “completely controls the market” for galley handling and “stand[s] as a wall between” passenger airlines and “new-entrant firms.”

In-flight catering involves preparing on-board meals, and galley handling comprises loading, unloading, storing and transporting catering products.

“The Vancouver Airport Authority has abused its dominant market position by excluding and denying the benefits of competition to the in-flight catering marketplace at Vancouver International Airport,” then-competition commissioner John Pecman said in his September 2016 application.

“It has no legitimate explanation to justify the substantial prevention or lessening of competition that has resulted in higher prices, dampened innovation and lower service quality,” he said.

The hearings are slated to run for 17 days between Oct. 2 and Nov. 15.

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