ÚOHS fines Student Agency 6 million Kč

The Anti-Monopoly Office (ÚOHS) has fined travel company Student Agency (SA) 6.185 million Kč ($353,429) for unfair practices in connection with the low fares it charged for its Prague-Brno bus route two years ago, prices that competitor Asiana say forced it off the route.

According to the office's investigation, launched after Asiana filed a complaint two years ago, SA used predatory pricing from December 2007 to March 2008, putting ticket prices below cost, and sustaining a short-term loss the bigger company was able to sustain until Asiana had to drop out.

SA, however, disputes that the ticket price came at a loss for the company, and SA spokesman Aleš Ondrůj said, "It is nonsense to say we went below cost."

Asiana had initially set a price of 50 Kč for the Prague-Brno route, and SA quickly followed suite by dropping its 150 Kč ticket for the same route to 50 Kč.

An Asiana release said the company welcomed the ÚOHS' decision and furthermore is planning to seek damages.

The two-year investigation was due to the case's "complexity," ÚOHS President Petr Rafaj told the Czech News Agency, as the office had to create a detailed economic analysis to prove prices were below cost.

SA Business Director Jiří Schmidt told The Prague Post his company plans to appeal the decision, but a different outcome isn't likely.

"We've got 14 days to appeal the decision. But it's interesting, since the same authority that imposed the fine is the one that considers and rules on the appeal. I think our chance for overturning the decision on appeal is very small," he said.

As for Asiana's statement that it will consider seeking damages, Schmidt said he doesn't "think it's meant seriously."

Schmidt said SA's biggest problem with the decision is the precedent it could set for another form of transportation: the rails. SA has been looking to expand to the railways for years, and Schmidt questioned whether the state railways would be as careful with their own prices.

"During the time in dispute, [Czech Railways'] price was 35 Kč, and Asiana even charged 1 Kč for the route for about a week as a promotion," he said.

Claire Compton can be reached at
ccompton@praguepost.com