Turkish Competition Authority (“TCA”) granted exemption for the code-sharing agreement between Türk Hava Yolları A.O (“THY”) and InterGlobe Aviation Limited (“Indigo”) for the India-Turkey line. TCA determined that the code-sharing agreement is a horizontal cooperation agreement and is not eligible for negative clearance due to the exclusivity provision. Hence the agreement is assessed pursuant to individual exemption provisions.
Distinct from a standard code-sharing agreement, this agreement has a 10 years long exclusivity provision. TCA found this length reasonable based on parties’ arguments for investment return and “aircraft financing”. TCA came to the conclusion that the existing agreement between THY and Air India will continue and that any co-operation between other Turkish carriers and Indian carriers is not hindered, and that Indigo's investments and market entry requires the specified exclusivity provision. TCA also considered, THY and Indigo will independently determine their market capacities and commercial behaviors such as price/discount.
As per the individual exemption assessment; TCA determined that the agreement will not lead to anti-competitive restrictions and will create cost effectiveness, increase consumer welfare, decrease prices and increase product variety. Accordingly, TCA granted individual exemption to the code sharing agreement between Turkish Airlines and Indigo.
(TCA Decision - 04.04.2019, 19-14/190-86)
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