ISLAMABAD: The decision by the Civil Aviation Authority (CAA) to establish its own monopoly over flight kitchen at the new Islamabad International Airport has been termed against the spirit of competition amid concerns over conflict of interest.

The Competition Commission of Pakistan (CCP) has issued an opinion over establishment of a single flight kitchen by the CAA on a joint venture basis at the new airport.

The CCP has noted that the entry barriers created as a result of the move must be balanced by technical or economic progress, a fair share of which is passed on to the consumers.

It recommended that if an adverse impact on competition was outweighed by any resulting benefits, then any party winning the contract of the single flight kitchen at the airport must seek exemption from the CCP under Section 9 of the Competition Act on a pre-emptive basis for the exclusivity.

“CAA must ensure that the single flight kitchen would never at any point abuse its monopoly position,” the CCP opinion note added.

The note was finalised by a bench comprising Chairperson Vadiyya Khalil and Members Mueen Batlay and Dr Shahzad Ansar, after holding a hearing on the matter on Sept 22, which was attended by the CAA, domestic and international airlines and catering companies.

The CCP noted that the establishment of a single flight kitchen had raised certain competition concerns in its current form and gave its recommendations to address them.

It was noted that as a commercial partner in the single flight kitchen, the CAA might face a conflict of interest in terms of regulating it. The CCP, therefore, recommended that the CAA must consider other business models so that its commercial interest would not be in conflict with its regulatory role.

The CCP said that if the CAA chose to adopt an airport fee or royalty-based business model, the tariffs must not be so high so as to discourage airlines from airlifting meals from the new Islamabad International Airport.

The CCP recommended that at no point should any of the airlines be barred by the CAA from lifting meals from any feasible off-premises options available to them.

“The purpose of the recommendations in the opinion is to serve as guidelines for CAA and any party that is successful in obtaining the tender to run the single flight kitchen at the new Islamabad International Airport,” the CCP note said, adding that any situation which could result in restriction or distortion of competition in the in-flight catering to the detriment of general consumers should be avoided.

Published in Dawn, December 16th, 2016