Watchdog Trumps El Al Code Sharing

The Knesset Finance Committee on Tuesday approved a proposal to enforce the antitrust law on the airline industry. As a result, agreements by air carriers, El Al foremost among them, with rival airlines will be subject to review by the Antitrust Authority. The government watchdog intends to enforce competition on prices and services for passengers and cargo. The decision covers cooperation between airlines known as code sharing.

Antitrust Commissioner Ronit Kan commented, "This is an important and welcome decision that will help improve air travel and air cargo competition, which is crucial to tourism and the movement of goods."

The decision will go into effect once the rules are formulated determining which agreements airline companies will not have to submit for review or in 18 months from today, whichever comes first. The antitrust authority expects the process for determining exemptions, including hearing public objections, to take four to six months.

Overseeing code-sharing agreements brings Israel into line with practice in the United States and European Union countries.

The bill provides for the Antitrust Authority to approve agreements it finds do not harm competition. The authority would be empowered to require anti-competitive agreements to be amended or it could simply invalidate them.

El Al would be allowed to appeal to the antitrust tribunal. And transportation and foreign ministers would be able to approve anti-competitive agreements should they find them to be of particularly strategic-political importance.