In a significant blow to the airline industry, France’s competition watchdog has imposed a €14.6 million ($15.3 million) fine on two airlines after uncovering a scheme to inflate ticket prices while slashing services for passengers traveling to the French Caribbean islands. The Autorité de la concurrence revealed on Wednesday that Air Caraïbes, Air Antilles, and the consulting firm Miles Plus were all involved in the illegal price-fixing conspiracy, which spanned from 2015 to 2019.
Collusion to Exploit ‘Captive Customers’
The investigation, which started with dramatic dawn raids, found that the airlines and the consultancy worked together to manipulate prices for air travel, leading to steep fare hikes that severely impacted both local residents and tourists. The watchdog’s findings pointed to a scheme that targeted the islands’ residents, who, due to the lack of viable alternatives, were essentially “captive customers.”
“People living in these territories already face a significantly higher cost of living compared to mainland France, and with few options for air travel, they had no choice but to accept inflated prices,” the regulator explained in a statement. The price-fixing arrangements not only harmed residents but also dealt a blow to the islands’ vital tourism industries.
How the Scheme Unfolded
According to the competition authority, the airlines and Miles Plus engaged in a series of “non-aggression agreements” where they coordinated fares and restricted competition. The agreement prevented them from undercutting each other, allowing both airlines to keep prices artificially high. On top of this, the airlines agreed to slash services, creating a joint flight schedule that reduced available seating by 10%.
