European Union Competition Law Developments in the Aviation Sector: July to December 2016

Abstract

The second half of 2016 has seen a myriad of competition law developments relevant to the aviation sector. This article summarizes the main competition law developments over the past six months and provides the reader with greater detail of each of these developments. The European Commission (hereinafter ‘Commission’) began a second consultation on its proposed reform of the 2014 State aid General Block Exemption Regulation. In particular, the proposed reforms would expand the current exemptions and compensation schemes in relation to, for example, small airports. Another major development is the legal challenge brought by Deutsche Lufthansa (hereinafter ‘Lufthansa’) against the Commission’s refusal to grant a partial waiver of the conditions the Commission imposed as part of its approval of Lufthansa’s takeover of Swiss International Airlines in 2005. The unprecedented appeal would, if successful, lift various requirements currently applying to the fares charged by Lufthansa on certain routes. In addition, the Brexit Competition Law Working Group (BCLWG) has published notes of two roundtable discussions on the antitrust and merger issues resulting from the United Kingdom’s (UK) referendum result to leave (‘Brexit’) the European Union (EU). In particular, the BCLWG discussed the implications of Brexit on the ‘one stop shop’ principle, on pan-European investigations and on the possibility of introducing public interest considerations in merger assessments. The UK’s withdrawal from the EU has the potential to effect a seismic change in the general competitive landscape of the UK and more generally across the EU aviation industry.