Lufthansa, Turkish Airlines Agreements Probed by EU

Deutsche Lufthansa AG’s ticket-sale agreement with Turkey’s Turk Hava Yollari AO is being investigated by the European Commission to determine if it violates competition rules.

The European Commission’s antitrust unit also opened a separate investigation into the ticket-sale agreement between Portugal’s TAP SGPS SA and Brussels Airlines NV. They are examining the deals the airlines had to sell seats on the routes between their respective home countries.

The airlines “should, in principle, be competing with each other,” the EU said today in a statement. The agreements “may distort competition, leading to higher prices and less service quality for customers on routes between Germany and Turkey and between Belgium and Portugal.”

Cologne, Germany-based Lufthansa is Europe’s second-largest airline and Turk Hava Yollari is the Istanbul-based national carrier known as Turkish Airlines. Brussels Airlines is privately-owned, and TAP SGPS, or TAP Portugal, is state-owned.

Tap said in statement that it would cooperate with probe.

“TAP has not been informed that any inquiry is ongoing,” said Lucia Cavaleiro, a spokeswoman for TAP in Lisbon. “Our code-share with Brussels Airlines follows the usual model.”

Peter Schneckenleitner, a spokesman for Cologne-based Lufthansa, confirmed in an e-mail the airline was informed about the probe today and declined to comment further.

Calls to the other companies for comment weren’t immediately returned. The commission has contacted the parties and local antitrust regulators, according to the statement.

Lufthansa aided the commission and escaped being sanctioned in November when the antitrust body fined 11 carriers 799.4 million euros ($1.08 billion) for coordinating fuel and security fees. Under EU rules, companies can be fined 10 percent of annual sales for antitrust violations. The commission typically opts for a penalty of from 2 percent to 3 percent of sales in cartel cases.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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