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Brussels, 28 October 2002

Commission clears GF-X air freight trading platform between several European airlines

The European Commission has cleared the proposed creation by Lufthansa, Air France, British Airways and Global Freight Exchange Limited of a joint venture called GF-X Operations Limited. GF-X will provide an electronic business to business (B2B) trading platform, which will facilitate the sale of air freight capacity between air freight forwarders (the buyers) and air freight carriers (the sellers). The Commission's market investigation confirmed that GF-X will be an additional distribution channel for air freight capacity and that there are no concerns that the proposed transaction would lead to the creation or strengthening of a dominant position. Moreover, the joint venture is set up in such a way that it will not lead to any co-ordination of the competitive conduct of the parent companies on the market for air freight transport.

Lufthansa, Air France and British Airways are three European airlines which provide scheduled and cargo air services as well as air transport related services. Global Freight exchange Limited (GFEL), which was originally founded in 1998 by private individuals and started commercial trading in 2000, is the current owner of GF-X.

The Commission's one-month investigation showed that both air carriers and air freight forwarders regard GF-X as an additional distribution channel for air freight capacity which is under competitive pressure of other electronic distribution channels (e.g. weblinks, cargo community systems and other B2B platforms) as well as traditional distribution channels (e.g. direct contacts by phone, fax or e-mail). The share of worldwide cargo capacity of air carriers traded via electronic distribution channels account for less than 5%.

GF-X does not give member carriers any preferential treatment and carriers are not obliged to offer better rates or discounts for GF-X than for alternative distribution channels. Restrictions on the carriers to operate and develop electronic on-line markets for trading of air freight capacity are limited to a two -year start-up period. Membership is currently open to all air freight forwarders and carriers subject to reasonable commercial objective and non-discriminatory criteria. Therefore, the transaction is not likely to trigger any foreclosure effects on the air freight distribution market nor on the vertically related air freight transport market.

Moreover, GF-X is set up in such a way as to prevent the exchange of commercially sensitive information between the members. In particular, sales negotiations will be conducted on a bilateral basis and as such they will not reveal more information than is currently made available to buyers under the existing sales channels.

The Commission has therefore concluded that the transaction would not create or strengthen a dominant position and would not lead to any co-ordination of the competitive conduct of the parent companies on the market for air freight transport.

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