Christine Meyer og Jostein Skaar
Director General Christine Meyer and Director Jostein Skaar. Photo: Marit Hommedal.

Split solution for airline loyalty program

The Norwegian Competition Authority recommends continuing the ban on frequent-flyer or loyalty programs for most domestic airline routes in Norway, but is proposing to repeal the ban on the three largest city pairs, Oslo-Bergen, Oslo-Trondheim and Oslo-Stavanger.

– We consider that competition is sufficiently robust in these three busiest domestic air routes to recommend that they be excluded from the prohibition on earning points in loyalty programs, says Director General for Competition Christine B. Meyer.

Each of these three routes serves well over a million passengers annually.

– The Authority considers it unlikely that the airlines will reduce their capacity significantly on these routes if earning loyalty points is allowed, says Meyer.

The protection of competition – not competitors – has guided the Competition Authority's recommendation to the Ministry of Government Administration and Reform on the use of frequent flyer programs in aviation.

– The major distinction in the Norwegian aviation market is between those airline passengers who face a monopoly and those who face competition. A full repeal of the ban on frequent flyer programs could lead to a significantly diminished schedule of flights and more monopoly routes, says Meyer.

The continuation of the prohibition of earning frequent flyer points should therefore ensure that consumers and businesses continue to benefit from competition on routes with fewer passengers.

– Passengers on routes with lower traffic should also enjoy freedom of choice, low prices and good flight schedules. The Competition Authority fears that loyalty-building programs on low-traffic routes could lead to the routes being abandoned by an airline, says director Jostein Skaar.

The recommendation from the Competition Authority is based on a competition economics analysis of the effects of the loyalty programs on competition in Norwegian air traffic. Based on this assessment, the Authority also examined whether there is legal authority to maintain a prohibition within the framework of the Competition Act § 14.

An assessment of the public version of the Authority's recommendation to the Ministry can take several weeks. The public version of the recommendation will be published on the Competition Authority's website.

Air routes with competition in 2002

   

Air routes with competition in 2012

     

Air routes - recommended excluded from the prohibition on earning loyalty points

Flyruter       Flyruter       Flyruter  

Graphic: Konkurransetilsynet
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Contact persons

Christine Meyer
Director General
Phone: +47 55 59 75 30
Cellphone: +47 952 05 699
E-mail: christine.meyer@kt.no

Jostein Skaar
Director
Phone: +47 55 59 75 11
Cellphone: +47 959 33 827
E-mail: jostein.skaar@kt.no

Torny Aarbakke
Director of Public Relations
Phone: +47 55 59 75 12
Cellphone: +47 959 33 827
E-mail: torny.aarbakke@kt.no

Ronny Turøy
Communication Advisor
Phone: +47 55 59 76 32
Mobiltelefon: +47 917 13 195
E-mail: ronny.turoy@kt.no 

Last changed: 06/02/2012