European Union Competition Law Developments in the Aviation Sector: July to December 2018

Abstract

The second half of 2018 highlights that the aviation sector continues to see developments new in competition law. This article summarizes the main developments over the past six months and provides the reader with greater detail of each of these developments. One major development is the July 2018 judgment by the European Court of Justice in the dispute between flyLAL, on the one hand, and Riga Airport and Air Baltic, on the other. The court ruled that flyLAL was entitled to bring an action for damages against Riga Airport and Air Baltic (both Latvian companies) in Lithuania. In doing so, the Court clarified the interpretation of both Articles 5(3) and 5(5) of Regulation 44/2001. In particular, it ruled that loss of earnings caused by predatory pricing can constitute initial damage for the purposes of Article 5(3) and clarified the circumstances in which a tortious claim can be brought in the location of a branch of the defendant under Article 5(5). ASL has launched a claim for damages before the General Court arguing that the European Commission’s (the ‘Commission’) decision to block the proposed acquisition of TNT Express by UPS, on the grounds that the intra-EEA (European Economic Area) express small packages delivery services market would be reduced in a large number of Member States, has caused ASL to incur losses of EUR 263m. The Commission’s decision to block the merger has since been overturned by the General Court, and an appeal brought by the Commission is currently pending before the European Court of Justice. This period has also continued to see a succession of State aid cases heard in the General Court, with no less than five judgments involving Ryanair. Ryanair appealed decisions by the Commission concerning State aid at airports in Nîmes, Angoulême, Altenburg-Nobitz and Pau-Pyrénées (where Transavia also lodged an appeal), but was unsuccessful in each. However, the General Court did annul a Commission decision, insofar as it related to Ryanair and its subsidiary, finding that they had received illegal State aid at Zweibrücken airport in Germany.