Brussels, 06/07/2010 (Agence Europe) - On Tuesday 6 July, the General Court of the EU delivered its judgments in two appeals by Ryanair Holding plc (case T-342/07) and Air Lingus plc (case T-411/07) respectively against decisions by the European Commission. In both cases, the Court fully the Commission decisions which: - on 27 June 2007 (see EUROPE 9456), declared that Ryanair's planned takeover of Aer Lingus, after this company was privatised, was incompatible with the common market; - and, on 11 October 2007, refused to grant the Aer Lingus request that Ryanair be ordered to sell all its shares in that company (see EUROPE 9587 and 9626).
In the first judgment (T-342/07 the General Court stated that that none of the arguments put forward by Ryanair was capable of calling into question the findings made by the Commission in its decision, according to which the implementation of the merger would significantly impede effective competition as a result of the creation of a dominant position on a number of routes from or to Dublin, Cork and Shannon. It went on that those dominant positions were monopolistic or very significant and were sufficient, in themselves, to validate the Commission's finding that the implementation of the merger must be declared incompatible with the common market. Furthermore, Ryanair did not submit any arguments which were capable of calling into question the Commission's assessment of the commitments proposed during the administrative procedure. These commitments, including those on time slots and the number of aircraft, would not be capable of remedying in a viable and durable manner the barriers to competition which would result from the merger.
With regard to the second judgment (T-411/07), the General Court noted that, under the terms of the merger regulation, the Commission did not have the power to accede to the Aer Lingus request and order Ryanair to sell its share in the capital of the former since the acquisition had not taken place and Ryanair only held a minority shareholding in Aer Lingus, which did not allow it to exert any control over Aer Lingus, either in law or in practice, so that the shareholding could not be likened to a merger which had already arisen, which would have given the Commission the right to act. The General Court said that this justified the Commission's decision not to accede to the request by Aer Lingus.
Commission satisfaction at two decisions
The Commission has welcomed the two rulings which uphold its decisions and has expressed its contentment that the Court had acknowledged its “very detailed and careful” analysis in support of them. The Ryanair-Aer Lingus merger, affecting 35 destinations, would have harmed competition and penalised consumers. This is the second time that the Court has “validated the Commission's practice of analysing the impact of airline mergers”. A Commission spokesman said, too, that the Commission would shortly present opinions on a series of other mergers in this sector, including those between British Airways and Iberia (opinion expected on 15 July), Olympic Airways and Asian Airlines (opinion on 30 July) and United Airlines and Continental Airlines (opinion on 27 July). The Commission may deliver its conclusions on these operations by the end of July or in September. (F.R./transl.rt)