Cost concerns and ‘higher priorities’ slam shut CICRA airline review

Monday 21 May 2018

An investigation into whether one island airline operating under the banner of another was in breach of competition law has been suspended because it would not be cost-effective to continue and other matters have higher priority, according to the CI regulator.

CICRA started the probe into the Flybe-Blue Islands franchise deal back in 2016 over fears that their partnership would bring less competition to island skies and constitute poor value for money for customers.

The airlines hit back at the original allegations, but their responses were deemed “unsatisfactory” by the regulator.

But in March 2018, air transport service Waves launched, bringing new competition.

We are launching a formal investigation into arrangements between Flybe and Blue Islands. Read more here: https://t.co/9K3TSn5xMO

— CICRA (@CICRAregulator) December 16, 2016

CICRA said this left them with three options: 

"To close the case.  CICRA would do this if the evidence gathered did not support it;

 To conclude that CICRA has a strong enough case to proceed to formal (draft) decision that the law had been broken;

 To conclude that CICRA may have a strong enough case to continue to a formal draft decision, but that circumstances since we opened the case have changed so that formal action might not be most efficient or cost-effective way to proceed."

They subsequently concluded that it wouldn’t be cost effective to continue or serve the interests of the consumer.

Blue Islands CEO, Rob Veron commented:

"Blue Islands are pleased that this extraordinarily long, unnecessary and expensive process for both the tax payer and Blue Islands has now been concluded. It has taken CICRA almost two years of investigation to close this investigation.  Blue Islands have consistently maintained that the franchise agreement does not infringe the Jersey Competition Law."

Michael Byrne, CICRA CEO, explained: "CICRA has to prioritise projects that appear likely to have the greatest impact on consumer welfare. We have decided that, with a new operator now offering flights on the inter-Island route, we should step back from this review for the time being and monitor the impact of this increased competition. This will also allow us to focus our resources on other matters that have a higher priority at the present time.

"This decision does not amount to a statement as to whether any party to the franchise arrangements infringed competition law and no inference to that effect should be made."