MercoPress. South Atlantic News Agency

Lan Chile fined for &quotdominant&quot practices in Punta Arenas

Chile?s Free Competition Tribunal, TDLC, fined Lan Airlines and Lan Cargo the equivalent of 128.000 US dollars each for non competition practices in the transport of international cargo to Punta Arenas, where both companies have a “dominant situation”, according to the ruling.

The claim was presented in 2003 by Punta Arenas Anti monopoly regional office following Lan?s restructuring of its services in Santiago and Punta Arenas airports. Until the new system was imposed international cargo was flown by Lan to Punta Arenas and if requested by the customer, transported by land to a storage depot belonging to the Austral Port Authority. All of which including the Customs liberation paperwork done for a reasonable fee. However under the post 2003 system, the international cargo was immediately deposited in a Lan Chile affiliate depot at Punta Arenas airport at a significant fee, and if requested by the customer to be transported to the Austral Port Authority storage facilities, and if a fork tractor was needed, the cost could jump up to 400% over the previous arrangement. The TDLC ruling established that "Lan Airlines and Lan Cargo have attempted against free competition by the abusive exploitation of its dominant position in the international air cargo transport market to Punta Arenas with anti competition effects on the air cargo customs storage market in the aforementioned city". Besides the fines TDLC ordered Lan Airlines to restructure its cargo transport fees from the airport to the Punta Arenas port storage area and to stop charging fork tractor services to air cargoes transported to third parties storage depots outside the airport premises; a practice which constitutes a ?clear discrimination?. TDLC also recommends Chile?s Finance Ministry to instruct the Customs Services to make the necessary modifications to favor competition among customs storage companies both inside and outside airport premises. Another point made by TDLC is that according to existent regulations airlines, their associates, shareholders or controlled companies, allied affiliates or in anyway linked are banned from direct or indirect participation with consortiums or companies involved in exploiting airport concessions. This with the specific purpose of protecting free competition in the air transport sector and in the provision of related support services, such as is customs storage. Lan has ten working days from the notification date to appeal the sentence, but it must previously deposit 10% of the total fines imposed by TDLC.