Bailiff questions impact of fuel row in Royal Court

Friday 06 October 2017

The Bailiff has questioned the impact of the refusal from ATF Fuels to provide fuel for resale to a fixed-base operator during a landmark case against the local competition authority that is being heard in Royal Court.

ATF Fuels is appealing a 2016 decision by the regulator, the Jersey Competition and Regulatory Authority (JCRA) who found that the company had abused a dominant market position by refusing to supply Aviation Beauport with fuel for resale, and by charging them more than previous suppliers.

Yesterday, Advocate Nigel Sanders, who is representing the JCRA, defended the regulator's decision saying that ATF Fuels' refusal to provide fuel for resale to Aviation Beauport (now Gama Aviation) had disrupted their business. He explained that fuel delivery was part of a package of services that the fixed-base operator provided to its customers and that to deliver this service, they relied on the fuel. He said customers wanted to be able to get the fuel through Aviation Beauport but that they couldn't answer the demand. As such, Advocate Sanders stated that the operator's ability to deliver a full ground-handling service was "eliminated, restricted and weakened." Furthermore, he said that Aviation Beauport's competitive offering was also affected by "ATF Fuels' abuse of its dominant position."

The Bailiff, Sir William Bailhache, who is hearing the case with Jurats Colette Crill and Jerry Ramsden questioned that statement saying that Aviation Beauport could have chosen to provide the fuel without having to buy it from ATF Fuels. He argued that ATF Fuels would follow the exact same process to carry out the delivery whether the fuel was sold on or not. He also described the arrangement sought by Aviation Beauport - fuel purchased at a discounted price from ATF Fuels to be sold on to its customers with a margin - was a "sweetheart deal" given that it was in a position of monopoly as the only one-stop shop in that particular area.

Advocate Sanders then mentioned ATF Fuels' concerns over the alleged excessive pricing set by Aviation Beauport. He said: "It is not their job to be policing what pricing is practised to a downstream customer of ATF, the same it is not their job to worry about safety. It is ultimately a customer's choice: if they thought Aviation Beauport was charging too much they could choose no to use them."

The Bailiff then asked: "How can we say ATF Fuels abused their dominant position when the effect is not in the market in which they are operating?" Later on, he added: "Is JCRA concerned by the lack of consumer's choice in the downstream market because there is no one-stop shop offer or for the lack of competition in the upstream market?"

Advocate Sanders added that Aviation Beauport's customers could not understand the disruption of ABP services and that many complained it was less convenient to have to contact ATF directly. To which the Bailiff replied: "This is very critical of customers who don't like change very much. It is simply two transactions instead of one." 

The JCRA's advocate stated that preventing anyone from purchasing fuel is a problem and that there had been discrimination between the way the Aero Club was treated and the way Aviation Beauport was treated.

The case is expected to conclude today.