The Vancouver Airport Authority (VAA), an agency
responsible for the operation and management of the Vancouver
International Airport, has been accused of abusing its dominant
market position, contrary to s. 79 of the Competition
Act. In an application filed with the Competition
Tribunal last week, the Competition Bureau alleged that VAA had
refused to allow new in-flight catering suppliers to operate at the
Vancouver International Airport by denying them airside
access and tying access to the leasing of Airport land.
In-flight catering service consists of catering (the preparation
of on-board meals) and galley handling (the loading, unloading,
warehousing and transportation of catering
products). While in-flight catering suppliers are directly
selected by airlines based on pricing and service, VAA has the
sole discretion to grant access to the airside, the area inside the
security perimeter where suppliers must enter to operate and
provide services. In essence, without permission to access to the
airside, an in-flight catering service supplier would not be able
to operate its business at the Airport.
The Bureau claimed that VAA has repeatedly refused to permit
anyone to provide in-flight catering service at the Vancouver
International Airport, other than the two existing firms, both
of which have operated at the Airport since 1992. In addition, in
exchange for authorization to access the airside, the incumbent
catering firms were required to pay access fees and lease Airport
land from VAA for the operation of their catering kitchen
facilities. There are potential competitive concerns with the
conditions that VAA impose on the suppliers because
off-Airport land can be less expensive, and firms that provide
only galley handling services who do not require kitchen facilities
are entirely excluded from operating at the Airport. The Bureau
refused to accept VAA's explanations for excluding
new entrants as legitimate business justification, and
concluded that VAA's refusal to grant airside access to
in-flight catering suppliers has or is likely to have
VAA has not filed a response to the Notice of Application at
this time. The Bureau is seeking an order from the Competition
Tribunal prohibiting VAA from engaging in its current practice
of denying airside access to new-entrant suppliers and
tying access with mandatory leasing, and requiring VAA to grant
airside access to new in-flight catering
suppliers that otherwise meet the health and safety
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