The International Air Transport Association (IATA) announced that it has become a complainant in an investigation being conducted by the European Commission’s Directorate General for Competition (DG-COMP) into alleged abuses of dominant positions by manufacturers of aviation equipment.
In 2015 DG-COMP sent questionnaires to several industry stakeholders, including IATA member airlines, requesting information to validate claims of abuses of dominant positions by original equipment makers (OEMs) with respect to their control of aftermarket repairs, including parts and services.
“This is an area of deep concern for our members. There are relatively few equipment vendors and our members are frustrated that there is little flexibility in negotiations for aftermarket services. Airlines do not have the leverage to resolve these concerns individually. So IATA is fulfilling its role as their global trade association and representing their interests as a complainant,” said Tony Tyler, IATA’s Director General and CEO.
As the complainant, IATA is making no claims for monetary damages or any other forms of compensation for past conduct.
“Our focus is on the future. Our members want to be able to negotiate contract terms more effectively and with more options than the OEM community will entertain today. Our aim is to help re-balance the relationship so that airlines and OEMs can work together as true business partners in a normal commercial relationship,” said Tyler.
Tyler emphasized that while this is an important issue in the airline-OEM relationship, it is only one aspect of that relationship. “OEM revenues are airline costs, so there is a natural tension on this issue. But airlines are and will continue to be important customers for OEMs. And we all have major common interests in our dedication to the continuous improvement of safety, efficiency and sustainability. Whatever conclusion the investigation comes to, at the end of the process there will be greater clarity on the rules of the game and how they should be applied. That will be a good development for all involved,” said Tyler.