European Union and United Kingdom Competition Law Developments in the Aviation Sector: January to June 2022

Abstract

It goes without saying that the effects of the COVID-19 pandemic continue to be acutely felt by the aviation industry. This can be readily seen from the competition law developments in the first half of 2022 which continues to be dominated by State aid cases – not only Commission decisions approving State aid to carriers and arports, but also appeals against previous Commission decisions. This article summarizes the main developments over the past six months and provides the reader with an overview of the details of each of these developments. The first six months of 2022 continue to be dominated by State aid cases, be it decisions by the European Commission (‘Commission’) to approve State aid applications, appeals of those or previously decided State aid cases, or the handing down of judgments from the General Court (GC). As mentioned previously, this is to be expected for years to come. Taking a quick look at the State aid applications submitted to the Commission, most of the applications were submitted under Article 107(2)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), which enables the Commission to approve State aid granted to compensate specific companies or specific sectors for the damages directly caused by ‘exceptional occurrences’. While COVID-19 restrictions continued to be eased in early 2022, operators continued to count the cost of the pandemic, and Member States continued to support operators for the damages directly linked to the COVID-19 pandemic. The Commission is also empowered to assess State aid measures under Article 107(3)(b) TFEU, which enables it to approve State aid granted to promote important projects of common European interest or to remedy a serious disturbance in the economy of a Member State and few would dispute that the COVID-19 pandemic caused serious disturbances in the economies of EU Member States. The final main mechanism to consider State aid is the Temporary Framework specifically set up by the Commission to enable the quick approval of State aid providing that the measures fell within defined parameters. The author is not aware of any merger notifications to EU/UK authorities – indeed, following the abandonment of some previous mergers, and challenges faced by the industry as it attempts to ramp up operations following the pandemic, it is perhaps unsurprising that mergers have not been a priority matter in the aviation sector.