Fuel provider denies discrimination allegations

Thursday 05 October 2017

Local fuel provider ATF Fuels denied allegations it had discriminated against a private aircraft services company in the Royal Court yesterday as part of a landmark case against the Jersey Competition Regulatory Authority (JCRA).

ATF Fuels is appealing a 2016 decision by the regulator, the 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.

Advocate John Kelleher, who is representing the fuel provider, denied that ATF Fuels had allowed other organisations to buy fuel for resale, while refusing to do so for Aviation Beauport.

He explained that ATF had agreements in place with operators at the airport such as the Aero Club but that it supplied its members directly. As per the agreement, the Aero Club only acted as an agent not a reseller of fuel provided by ATF. 

Advocate Kelleher then told Court that the provision of fuel to its clients was not indispensable to Aviation Beauport ground-handling operations and that the refusal had not put its operations at risk.

He said: "Aviation Beauport was neither eliminated from the ground handling market neither was it weakened. The access to fuelling services is not essential to Aviation Beauport's ability to compete on its market. It was still able to provide ground handling services."

Commenting on the JCRA's conclusion that ATF had prejudiced Aviation Beauport by charging them more than other customers who purchased large volumes, Advocate Kelleher said that the analysis was flawed. He said that JCRA had not explained how it had chosen seven customers out of base of 50, to draw its comparisons on pricing.

He then explained that the fuel costs vary whether a customer is 'scheduled' or 'unscheduled.' Scheduled customers are Easyjet or British Airways who know in advance when they will require fuel, while Aviation Beauport is an unscheduled customer who is more likely to call at the last minute to ask for a delivery. Advocate Kelleher explained that ATF does not have the resource to cover for that type of demands, leading to a higher price. He however assured the Court that Aviation Beauport competitors were charged the same prices.

Advocate Nigel Sanders, who is defending the JCRA, started his address to the Court by saying that ATF didn't deny it refused to provide fuel for resale to Aviation Beauport, or that the operator was paying more than it was before. He continued saying that the fuel provider's appeal was largely based on no evidence and on a "pigeon hole legal approach."  

He explained that Aviation Beauport was offering a full fixed-base operator service and that it never denied charging a margin on fuel but that it never carried out the supply. Advocate Sanders told Court it wouldn't have been economically feasible for the company to run its own physical refuelling supply. He added that Aviation Beauport could have survived without offering the supply of fuel to its customers but that it wasn't the point. He said: "Aviation Beauport was forced to deliver a different service to what it had been doing."

The case which is being heard by the Bailiff Sir William Bailhache and Jurats Colette Crill and Jeremy Ramsden, is expected to last for another two days.