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Cyprus

Hermes airport fined over car rental conditions

By George Psyllides

THE COMPETITION watchdog (CPC) has fined airport operator Hermes €750,000 after deciding that it had exploited its dominant position in relation with car rental companies.

The complaint was filed by Demstar Rentals Ltd, which represents Hertz.

The commission decided that Hermes had imposed arbitrary trading conditions in the competition for ‘on’ airport agreements to provide car rental services and the ‘off’ airport agreement with Hertz, a statement from the CPC said.

Both on and off airport agreements concern areas in the airports administered by Hermes.

On airport agreements afford companies the right of operating in the airport – offices, reception areas, and parking lots while off airport allow the licensed company to shuttle its customers to and from the terminal to its installations.

Off airport permit holders cannot provide car rental services to customers upon arrival. They are allowed to be at the arrivals to pick up the customers who have already reserved their vehicle through the internet.

Hertz lodged a complaint in November 2013, accusing Hermes of abusing its dominant position. It also charged that the airport operator had abused Hertz’s financial dependence on Hermes.

Hertz had been providing car rental services at the airport after succeeding in the first competition, and took part in the second one in 2011 without success however.

In the second competition, Hermes decided to cut the number of rental companies from seven to four. At the same time it raised the minimum annual guarantee and increased the minimum rent.

By doing so, Hermes raised the lowest bid amount that companies could submit, Hertz said.

Hermes also reserved its right to enter off airport agreements.

The commission decided that Hermes’ decision to reduce the number of on airport operators while also reserving the right to enter off airport agreements “constitutes abusive conduct when seen in combination with the raise in the minimum total rent.”

The commission said Hermes’ abusive conduct also extended to off airport agreements through which it reduced Hertz’s rights and raised the rent at the same time.

Hermes expressed surprise at the decision, saying it was wrong and based on wrong facts.

The company said it will file an appeal with the Supreme Court.

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