Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,  BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels, 5.7.2019  
C(2019 ) 5244 final  
PUBLIC VERSION  
 
To the notifying parties  
Subject : Case M. 9287 – Connect Airways/ Flybe  
Commission decision pursuant to Article 6(1)(b) in conjunction with 
Article 6( 2) of Council Regulation No  139/20041 and Article 57 of the 
Agreement on the European Economic Area2 
  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ('TFEU') has introduced certain changes, such as the 
replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of 
the TFEU will be used throughout this decision . 
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and 
other  confidential information. The 
omissions are shown thus […] . Where 
possible the information omitted has been 
replaced by ranges of figures or a general 
description.  
 
2  
Table of Contents  
1. THE PARTIES  ................................ ................................ ................................ ............  4 
2. CONCENTRATION  ................................ ................................ ................................ ... 6 
2.1 Overview  ................................ ................................ ................................ ...........  6 
2.2 Acquisition of joint control over Flybe Group, Flybe, Propius and 
Stobart Air  ................................ ................................ ................................ .........  6 
2.3 The first and second transaction constitute a single concentration  ...................  8 
2.4 Conclusion  ................................ ................................ ................................ ....... 10 
3. EU DIMENSION  ................................ ................................ ................................ ...... 10 
4. ANALYTICAL FRAM EWORK AND MARKET DEF INITION  ...........................  11 
4.1 Air transport of passengers 3rd O&D approach  ................................ ...............  12 
4.1.1  Relevance of the O&D approach  ................................ .......................  12 
4.1.2  Distinction between groups of passengers ................................ .........  13 
4.1.3  Distinction between direct and indirect flights  ................................ .. 14 
4.1.4  Airport substitutability  ................................ ................................ ....... 15 
4.1.5  Substitutability of train transport services with air transport 
services  ................................ ................................ ..............................  23 
4.1.6  Relevance of the market for air transport services to tour 
operators  ................................ ................................ ............................  25 
4.2 Air transport of passengers – Airport -by-airport approac h .............................  26 
4.2.1  Relevance of the airport -by-airport approach  ................................ .... 26 
4.2.2  Relevant markets for the assessment of the effects of the 
Transaction on passenger air transport services under the 
airport -by-airport approach ................................ ................................  30 
4.3 Market for the provision of access to flights of another carrier for 
connecting passengers in the context of interlining arrangements  ..................  36 
4.3.1  Relevance of feeder traffic analysis ................................ ...................  36 
4.3.2  Market definition  ................................ ................................ ...............  37 
4.4 Air transport of cargo  ................................ ................................ ......................  39 
4.5 Maintenance, repair and overhaul ( “MRO ”) services  ................................ ..... 41 
4.6 Dry-leasing, wet -leasing and franchise services to other airlines  ...................  42 
4.7 Ground -handling services  ................................ ................................ ................  49 
4.8 Competitive situation most likely to prevail absent the Transaction  ..............  50 
4.8.1  Flybe’s history and financial background  ................................ .........  51 
4.8.2  Failing Firm  ................................ ................................ .......................  51 
 
3 4.8.3  Most likely situation absent the Transaction  ................................ ..... 54 
4.8.4  Conclusion  ................................ ................................ .........................  56 
4.9 Competitive situation for the assessment of air/rail overlaps  ..........................  56 
5. COMPETITIVE ASSESSME NT ................................ ................................ ..............  57 
5.1 Passenger air transport services  ................................ ................................ ....... 57 
5.1.1  Passenger air transport services under the O&D approach  ...............  57 
5.1.2  Passenger air transport services under the airport -by-airport 
approach ................................ ................................ .............................  89 
5.1.3  Feeder traffic ................................ ................................ ....................  110 
5.2 Dry leasing services to airlines  ................................ ................................ ...... 123 
5.3 Wet-leasing services to airlines  ................................ ................................ ..... 124 
5.4 Franchise services to airlines  ................................ ................................ .........  125 
5.5 Cargo air transport services  ................................ ................................ ...........  126 
5.6 MRO services  ................................ ................................ ................................  127 
5.6.1  Horizontal overlaps ................................ ................................ ..........  127 
5.6.2  Vertically affected markets  ................................ ..............................  127 
5.6.3  Conclusion  ................................ ................................ .......................  128 
5.7 Ground -handling services  ................................ ................................ ..............  128 
5.8 Airport infrastructure services  ................................ ................................ ....... 129 
5.9 Conclusion  ................................ ................................ ................................ ..... 131 
6. THE PROPOSED COMMITM ENTS  ................................ ................................ ..... 132 
6.1 Description  ................................ ................................ ................................ .... 132 
6.1.1  Slot relea se on city pairs with competition concerns  ......................  132 
6.1.2  Conditions pertaining to the slots  ................................ ....................  133 
6.1.3  Grandfathering rights  ................................ ................................ ....... 133 
6.1.4 Consideration  ................................ ................................ ...................  134 
6.1.5  Other provisions  ................................ ................................ ..............  134 
6.1.6  Sunset clause  ................................ ................................ ...................  135 
6.2 Assessment of the proposed Commitments  ................................ ...................  135 
6.2.1  Structure and design of the Commitments  ................................ ...... 136 
6.2.2  Outcome of the market test  ................................ ..............................  136 
6.2.3  Conclusion on the Commitments  ................................ ....................  137 
7. CONCLUSION  ................................ ................................ ................................ ....... 140 
 
 
 
4 Dear Sir or Madam,  
(1) On 14 May 2019 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which  Virgin 
Atlantic Limited ( “Virgin Atlantic ”), Cyrus Capital Partners, L.P. ( “Cyrus ”) and 
Stobart Group Limited ( “Stobart Group ”) acquire, through Connect Airways, 
within the meaning of Article 3(1)(b) of the Merger Regulation joint control of 
Flybe Group plc ( “Flybe Group ”) and its trading subsidiaries, Flybe Limited , which 
owns Flybe Aviation Services Limited,  and Flybe.com Limi ted (Flybe Limited, 
Flybe Aviation Services Limited and Flybe.com are together referred to as 
“Flybe ”).  
(2) Virgin Atlantic, Cyrus and Stobart Group also acquire, through Connect Airways, 
within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation  joint 
control of Propius Holdings Ltd  (“Propius ”), Stobart Aviation Limited’s aircraft 
leasing business, as well as of Stobart Aviation’s operating airline business, Stobart 
Air Unlimited Company  (“Stobart Air ”).3 Virgin Atlantic, Cyrus  and Stobart Group 
are together referred to as “the Notifying Parties ”. Flybe Group, Flybe, Propius and 
Stobart Air a re together referred to as the “Target companies ”. The operations which 
bring about the above mentioned concentrations are jointly referred to as the 
“Transac tion”. 
1. THE PARTIES  
(3) Virgin Atlantic is the holding company of Virgin Atlantic Airways Limited 
(“VAA ”), and Virgin Holidays Limited, a tour operator in the United Kingdom.  
(4) VAA is an airline registered in the United Kingdom, which flies to 34 destinations 
worldwide, including locations across the United States, Canada, Mexico and the 
Caribbean, and certain destinations in Africa, the Middle East and Asia. VAA 
primarily provides passenger air transport services but also cargo air transport 
services as well as maintenance, repair, and overhaul ( “MRO ”) services.  
(5) Virgin Atlantic is currently jointly controlled by Virgin Group Holdings Limited 
(“Virgin Group ”) and Delta Air Lines, Inc. ( “Delta ”).4 On 8 January 2019, before 
the notification of the Transaction , Air France -KLM S.A. ( “AFKL ”, France), Delta 
and Virgin Group notified the Commission of their intention to acquire joint 
control over Virgin Atlantic within the meaning of Article 3(1)(b) and 3(4) of the 
Merger Regulation. That concentration was cleared uncond itionally by the 
Commission on 12 February 2019.5  
                                                 
3  Publication in the Official Journal of the European Union No C 171 , 20.05.2019, p. 24.  
4  See Case M.6828 – Delta Air Lines/Virgin Group/Virgin Atlantic Limited . 
5  See Case M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic . Completion of this 
transaction remains subject to a number of regulatory approvals, including a grant of antitrust 
immunity for the joint venture from the US Department of Transportation. The latter is not expected 
before Ju ly 2019, see Form CO, paragraph 113. Therefore, AFKL is not expected to acquire joint 
control, together with Virgin Group and Delta, over Virgin Atlantic before July 2019.  
 
5 (6) Consistent with its previous practice, the Commission undertakes to review notified 
concentrations affecting identical or overlapping markets in the order in which they 
are notified to it on a “first come,  first served ” basis, based on the date of 
notification.6  
(7) The Commission notes in that regard that, in assessing the competition effects of a 
proposed transaction under the Merger Regulation, it needs to compare the 
competitive conditions that would resul t from the notified concentration with those 
that would have prevailed in the absence of the concentration. As a general rule, the 
competitive conditions prevailing at the time of notification constitute  the relevant 
framework for evaluating the effects of  a concentration . In some circumstances, 
however, the Commission may take into account future changes to the market that 
can be reasonably predicted.  
(8) Therefore, the Transaction should be assessed taking into account the acquisition of 
joint control by AFKL  over Virgin Atlantic, together with its current parents Delta 
and Virgin Group, notified on 8 January 2019 and cleared unconditionally on 12 
February 2019.  
(9) The starting point for the Commission’s assessment of the Transaction is therefore 
a market structu re in which Virgin Atlantic is jointly controlled by AFKL, Delta 
and Virgin Group. For the purpose of this Decision, Virgin Atlantic (and its current 
and future parents, i.e. Virgin Group , Delta and AFKL ), Cyrus, Stobart Group are  
together  referred to as t he “Parties ”.  
(10) AFKL and Delta provide passenger air transport services, cargo air transport 
services, and MRO services. Each of AFKL and Delta flies to more than 300 
destinations worldwide. Virgin Group is the holding company of a group of 
companies active  in a wide range of products and services worldwide. In particular, 
Virgin Group jointly controls West Coast Trains  Limited  (“Virgin Trains ”) 
together with Stagecoach. Virgin Trains  operates the Inter City West Coast rail 
franchise in the United Kingdom.  In addition, Virgin Group is controlling Virgin 
Holiday, a long -haul scheduled UK tour operator.  
(11) Cyrus  is an investment adviser managing over USD [4] billion in securities and 
loans. Its client base is predominantly endowments, foundation s and family offices. 
[confidential information about Cyrus’ s investment strateg y] 
(12) Stobart Group  is active in aviation and infrastructure. Stobart Aviation forms one 
of the three core operating divisions of Stobart Group. Stobart Aviation invests in, 
develo ps and operates a number of aviation -related businesses. It controls London 
Southend Airport, Carlisle Lake District Airport, the Stobart Jet Centre, Stobart 
Aviation Services, Stobart Air and Propius, its aircraft leasing business.  
(13) Flybe Group is the pare nt company of Flybe. Flybe is a British regional airline with 
a focus on short -haul, point -to-point flights. It currently operates 190 routes serving 
12 countries from 73 departure points in the United Kingdom (29 routes) and other 
                                                 
6  See for example Cases M.7962 – ChemChina/Syngenta ; M.6214 – Seagate/HDD Business of 
Samsung ; M.6203 – Western Digital Ireland/Viviti Technologies . 
 
6 European countries (44 r outes). Flybe operates a fleet of 76 aircraft (most of which 
are small turboprop aircraft with 78 or fewer seats).  
(14) In addition to its scheduled passenger regional airline services, charter and cargo 
transport services and white -label flying for third part y airlines, Flybe’s training 
academy provides pilot, crew, engineering and other training services in -house and 
to third parties. Flybe also owns a MRO facility servicing both internal and third 
party customers.  
2. CONCENTRATION  
2.1  Overview  
(15) The Transaction comp rises the following two transactions, which in turn comprise 
three acquisitions by Virgin Atlantic, Cyrus and Stobart Aviation.  
(16) On 11 January 2019, Connect Airways Limited ( “Connect Airways ”), a mere 
acquisition vehicle jointly owned by Virgin Atlantic, th rough its wholly -owned 
subsidiary Virgin Travel Group Limited (30%), Cyrus, through its wholly -owned 
subsidiary DLP Holdings S.à r.l. (40%), and  Stobart Group, through its wholly -
owned subsidiary Stobart Aviation (30%), announced a recommended cash offer t o 
acquire the entire issued and to be issued share capital of Flybe Group, by way of a 
scheme of arrangement under Part 26 of the UK Companies Act 2006 (the “first 
transaction ”).7 
(17) Due to Flybe’s degrading financial position and in order to lessen the risk exposure 
of Flybe’s commercial counterparties (notably its credit card acquirers), the Parties 
had to arrange for a quicker change of control over Flybe. On 15 January 2019, 
Flybe Group and Connect Airways  thus entered into a share purchase agreement, 
pursuant to which Connect Airways acquire s the entire issued share capital of 
Flybe  (Flybe Group’s trading subsidiaries)  (the “second transaction ”).8 
(18) As part of the second transaction, Stobart Aviation  offer ed to sell to Connect 
Airways as consideration for its shareholding in Connect Airways (and resultantly 
Flybe) the entire issued share capital of Propius and 40% of the ordinary share 
capital of Stobart Air (through Everdeal 2019 Limited).9 
2.2 Acquisition of jo int control over Flybe Group , Flybe, Propius and Stobart Air   
(19) The binding terms of the joint bid agreement between Virgin Atlantic, Cyrus and 
Stobart Aviation dated 11 January 2019 provide for the governance rights of each 
                                                 
7  Form CO, paragraph 5.  
8  Annex A.4 to the Form CO.  
9  Pre-Transaction, Stobart Air is wholly owned and controlled by Stobart Aviation. Following internal 
reorganisation, Everdeal 2019 Li mited indirectly holds 100% of the ordinary share capital of Stobart 
Air. After the second transaction, 40% of the ordinary share capital of Everdeal 2019 Limited is held 
by Connect Airways [confidential information about Stobart’s governance and the trans action 
structure ]. See Form CO, paragraph 116, reply to RFI 7 of 1 July 2019 and email of the Parties of 4 
July 2019.  
 
7 of Virgin Atlantic, Cyrus and Sto bart Aviation over Connect Airways, defined as a 
limited company established for the purpose of pursuing the first transaction.10 
(20) In particular, pursuant to the joint bid agreement  with regard to Flybe Group , 
including its trading subsidiaries and the Share holders’ Agreement in relation to 
Connect Airways Limited :11  
a. [details of governance structure of Connect Airways, giving rise to joint control 
by each of Virgin Atlantic, Cyrus and Stobart Aviation ]; 
b. [details of governance structure of Connect Airways, giving rise to joint control 
by each of Virgin Atlantic, Cyrus and Stobart Aviation ]; 
c. [details of governance structure of Connect Airways, giving rise to joint control 
by each of Virgin Atlantic, Cyrus and Stobart Aviation ]12 
(21) [details of the corporate gover nance of Connect Airways]13 [details of the corporate 
governance of Connect Airways]   
(22) In light of the above considerations, each of Virgin Atlantic, Cyrus and Stobart 
Aviation has the possibility to exercise decisive influence over Connect Airways, 
which is used as a mere vehicle for the acquisition of Flybe Group , including its 
trading subsidiaries, by Virgin Atlantic, Cyrus and Stobart Aviation.14 
(23) Therefore, as a result of the fir st transaction, each of Virgin Atlantic, Cyrus and 
Stobart Aviation acquire s joint control over Flybe Group  and its trading 
subsidiaries . 
(24) As part of the second transaction, Connect Airways acquire s the entire issued share 
capital of Propius. Therefore, eac h of Virgin Atlantic, Cyrus and Stobart Aviation 
acquire s joint control over Propius .  
(25) As part of the second transaction, Connect Airways also acquire s 40% of the 
ordinary share capital of Everdeal 2019 Limited, which indirectly hold s 100% of 
the ordinary share capital of Stobart Air. It has been agreed that, as a result of the 
shareholders’ agreement and articles of association for Everdeal 2019 Limited:15  
                                                 
10  Annex A.2 to the Form CO.  
11  Annex A.2 to the Form CO, Schedule 1 – Binding terms of shareholders’ agreement; Annex A.5 to the 
Form Co,  Shareholders’ Agreement in relation to Connect Airways Limited.  
12  [details of the business plan ]  
13  Annex A.5 to the Form Co, Shareholders’ Agreement in relation to Connect Airways Limited, clause 
15. 
14  See paragraph 147 of the Commission Consolidated  Jurisdictional Notice under Council Regulation 
(EC) No 139/2004 on the control of concentrations between undertakings, OJ C 95, 16.4.2008, p. 1 
(the “Commission Consolidated Jurisdictional Notice”).  
15  Annex A.6 to the Form CO, Everdeal Shareholders Agreement of 21 February 2019 and Annex A.7 to 
the Form CO, Everdeal Articles of 21 February 2019.  
 
8 a. [details of the corporate governance structure of Everdeal, giving control to 
Connect Airways]16 [deta ils of the corporate governance structure of Everdeal, 
giving control to Connect Airways] ;  
b. [details of the corporate governance structure of Everdeal, giving control to 
Connect Airways]   
(26) Therefore, as a result of the second transaction, each of Virgin Atl antic, Cyrus and 
Stobart Aviation (through Connect Airways) and Everdeal Employees 2019 
Limited acquire s joint control over Stobart Air .  
2.3 The first and second transaction constitute a single concentration  
(27) As indicated in section s 2.1 and 2.2  above, the Transaction comprises the first and 
second transactions, which in turn comprise the acquisition of joint control by 
Virgin Atlantic, Cyrus and Stobart Aviation (through Connect Airways), by way of 
purchase of shares , over (i) Flybe Group, (ii) Flybe, and (iii) Propius and , together 
with Everdeal Employees 2019 Limited, over Stobart Air.  
(28) Virgin Atlantic, Cyrus and Stobart Aviation submit that, although these three 
acquisitions are not contractually inter -conditional, they are clearly unitary and 
interdependent and thus constitute a single concentration within the meaning of 
Article 3 of the Merger Regulation.17  
(29) According to paragraph 38 of the Commission Consolidated Jurisdictional Notice, 
“[t]wo or more transactions constitute a single concentrat ion for the purposes of 
Article 3 if they are unitary in nature. (…) For the assessment, the economic reality 
underlying the transactions is to be identified and thus the economic aim pursued 
by the parties. In other words, in order to determine the unitar y nature of the 
transactions in question, it is necessary, in each individual case, to ascertain 
whether those transactions are interdependent, in such a way that one transaction 
would not have been carried out without the other. ” In addition, according to  
paragraph 45 of the Commission Consolidated Jurisdictional Notice, “[a] single 
concentration may therefore exist if the same purchaser(s) acquire control of a 
single business, i.e. a single economic entity, via several legal transactions if those 
are inte r-conditional. ” 
(30) The Commission considers that the three acquisitions by Connect Airways are de 
facto inter -conditional.  
(31) First, the acquisition of Flybe Group (the first transaction) was intended to result in 
the acquisition of its trading subsidiaries (Fl ybe) as well. As acknowledged by 
Virgin Atlantic, Cyrus and Stobart Aviation, the acquisition of Flybe by way of a 
separate transaction (the second transaction) is only a “technical matter ” entailed 
by the “severe financial distress of Flybe. ”18 After compl etion of the second 
transaction, which would precede the first transaction, Flybe Group will have no 
                                                 
16  See footnote 9.  
17  Form CO, paragraph 137.  
18  See paragraph 3.15 of the Application for a derogation and  Form CO, paragraph 143.  
 
9 assets or market presence. However, Virgin Atlantic, Cyrus and Stobart Aviation 
will remain committed legally to implement the first transaction, subject t o 
shareholder approval.19 
(32) Second, the acquisition of a 100% shareholding in Propius and a 40% shareholding 
in Stobart Air forms part of the consideration to be paid by Stobart Aviation for its 
acquisition of joint control over Flybe via the second transacti on.20 In addition, 
completion of the two operations  (the acquisition of Flybe and the acquisition of 
the shareholding in Propius and Stobart Air)  is to occur simultaneously.21 
Therefore, since neither of the acquisition of Flybe and of the acquisition of 
Propius and a 40% shareholding in Stobart Air would take place without the other, 
the two operations are interdependent.  
(33) Furthermore, the Commission considers that the three acquisitions are required to 
transfer to Virgin Atlantic, Cyrus and Stobart Aviation a single business, i.e. a 
single economic entity managed for a common commercial purpose to which all 
the assets contribute. The Commission notes in particular that, according to Virgin 
Atlantic, Cyrus and Stobart Aviation, “the acquisition of Stobart Air and Propius 
by Connect Airways is therefore an integral part of the formation of the Connect 
Airways business ” and “combining Flybe and Stobart Air in a more integrated 
commercial co -operation with Virgin Atlantic’s long -haul operations will create a 
fully-fledged UK network carrier under the Virgin Atlantic brand. ”22  
(34) In light of the above considerations, the first and second transactions, which 
comprise the acquisition  of joint control over Flybe Group, Flybe, Propius and 
Stobart Air, are interdependent an d lead to the acquisition of joint control by Virgin 
Atlantic, Cyrus and Stobart Aviation over a single business. This jointly controlled 
single business , consisting of Flybe Group, Flybe, Propius and Stobart Air,  will be 
a full -function joint venture, since it will have sufficient own staff, financial 
resources and dedicated management for its operations, it will consist of pre -
existing businesses, will not be limited to exercising a specific function for its 
parents thus having its independent market presence, it will not have significant 
sale or purchase relationships with its parent and will operate on a lasting basis.23  
                                                 
19  Form CO, paragraph 143 et seq .  
20  More specifically, part of Stobart Aviation’s investment in Connect Airways is to be satisfied by way 
of a contribution in kind of Propius and a shareholding in Stobart Air, see Form CO, paragr aphs 14 
and 140.  
21  See paragraph 3.10 of the Application for a derogation and Form CO, paragraphs 134 and 140.  
22  See paragraphs 3.10 and 3.19 of the Application for a derogation and Form CO, paragraphs 66 and 
140.  
23  The first transaction (the acquisition of Flybe by Virgin Atlantic, Cyrus and Stobart Aviation) will lead 
to several undertakings acquiring joint control of another undertaking from a third party . Since the 
undertaking is acquired from a third party, the f irst transaction does not trigger an assessment of the 
full-functionality criterion (para. 91 of the Consolidated Jurisdictional Notice). However, the second 
transaction (the acquisition of Stobart Air and Propius by Virgin Atlantic, Cyrus and Stobart Avia tion) 
leads to the acquisition of joint control from one of the parties that will acquire joint control, namely 
Stobart Aviation. The second transaction therefore triggers the need to assess whether the single 
business that is being acquired (Flybe, Stobar t Air and Propius) and that will be jointly controlled is a 
 
 
10 (35) Therefore, the first and second transactions constitute a single concentration within 
the me aning of Article 3 of the Merger Regulation.  
2.4 Conclusion  
(36) The Transaction, by which Virgin Atlantic, Cyrus and Stobart Aviation acquire 
joint control over the business made of Flybe Group, Flybe, Propius and Stobart 
Air constitutes a concentration within the  meaning of Article 3(1)(b) and Article 
3(4) of the Merger Regulation.  
(37) The notification of the Transaction follows the adoption by the Commission of a 
decision under Article 7(3) of the Merger Regulation. Flybe has experienced 
negative operational results in three of the last four financial years and its financial 
position worsened as of spring 2018 leading to Flybe facing the imminent risk of 
insolvency in mid -January 2019. Virgin Atlantic, Stobart Group and Cyrus 
requested a derogation from the standstill  obligation in mid -February 2019. The 
Commission granted a derogation decision pursuant to Article 7 (3) EUMR on 2 1 
February 2019 despite prima facie competition concerns considering that the 
request was justified by the severe financial distress affecting  Flybe and the risk 
that it would stop trading if a change of control would not occur by that date  (the 
“Derogation Decision ”). The derogation was granted subject to conditions aiming 
at preserving effective competition until the Commission compl etes its m erger 
review process. These conditions included, amongst others, the following: that no 
voting rights are exercised by Connect Airways in the Target companies  and that 
the acquired business is held separate from Connect Airways .24  
(38) Pursuant to the Derogation Decision, the acquisition of shares in Flybe, Propius 
and Stobart Air was completed on 21 February 2019.25 The first transaction, the 
recommended cash offer to acquire the entire issued and to be issued share capital 
of Flybe Group, by way of a s cheme of arrangement under Part 26 of the UK 
Companies Act 2006, became effect ive on 11 March 2019.26 
3. EU DIMENSION  
(39) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million27 (Virgin Atlantic: c. EUR […]; Cyrus: c. EUR […] 
                                                                                                                                                 
full-function joint venture (para. 92 of the Consolidated Jurisdictional Notice). See also judgement of 
the Court of 7 September 2017, C -248/16, Austria Asphalt.  
24  Those conditions were subject to certain exceptions, for example the agreement and implementation of 
improved commercial terms with Flybe’s key suppliers by Virgin Atlantic, Cyrus and Stobart 
Aviation. See Commission Decision C(2019) 1605 of 21 February 2019, to be published.  
25  Form CO, paragraph 151.  
26  Form CO, paragraph 149.  
27  Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission 
Consolidated Jurisdictional Notice - CJN (OJ C95, 16.4.2008, p. 1). Virgin Atlantic’s turnover does 
includes Vi rgin Group, see Form CO, footnote 80. While Delta’s turnover is not included, the turnover 
thresholds for EU merger control are met. (AFKL’s turnover will not be taken into account since the 
 
 
11 million; Stobart Group: c. EUR […] million; Flybe Group: c. EUR […]). Each of 
them has an EU -wide turnover in excess of EUR 250 million  (Virgin Atlantic: c. 
EUR […]; Cyrus: c. EUR […]; Stobart Group: c. EUR […]; Flybe Group: c. EUR 
[…]),28 and not each of them achieve s more than two -thirds of their aggregate EU -
wide turnover within one and the same Member State.29 The notified operation 
therefore has an EU dimension.  
4. ANALYTICAL FRAMEWORK AND MARKET DEFINITION  
(40) The activities of the Connect Airways  (also through Virgin Atlantic’s parent 
companies AFKL, Delta and Virgin Group) and the Target companies overlap with 
regard to  (i) passenger air transport (under both the route -by-route and the airport -
by-airport approaches), (ii) cargo air transport and,  (iii) maintenance, repair and 
overhaul ( “MRO ”) services for aircraft. In addition, the Transaction gives rise to 
vertical relationships in relation to the provision of (i) access to flights of another 
carrier for connecting passengers ( “feeder traffic ”), (ii) MRO services, (iii) 
franchise services, (iv) aircraft leasing services, (v) ground -handling services and 
(vi) airport infrastructure services.  
(41) While t he Parties accept that post -Transaction there will be an unbroken chain of 
control of AFKL (and Delta ) over Flybe, they nevertheless claim that AFKL and 
Flybe would continue to operate as independent undertakings , as AFKL would 
only have a small indirect interest in Flybe (as the result of its future minority 
shareholding in Virgin Atlantic) ,30 AFKL would only be a minority shareholder in 
Virgin Atlantic and would not have the ability to unilaterally pass decisions 
                                                                                                                                                 
AFKL transaction was not closed before the date of establishing j urisdiction for the transaction at 
hand, see CJN, para. 172 .) 
28  The Commission has identified three possibilities for the geographic allocation of the turnover of air 
carriers: (i) the “50/50 split” method, (ii) the “point of origin” method, and (iii) the  “point of sale” 
method (see e.g. Case M.4439 Ryanair/Aer Lingus , recital 13 et seq. ). The “50/50 split” method 
consists in allocating the revenue from an individual route operated by an air carrier in a 50%/50% 
ratio to the country of origin and the count ry of final destination so as to take into account the cross 
border character of the service provided. The “point of origin” method consists in allocating the 
revenue from an individual route operated by an air carrier to the country where the place of dep arture 
of the flight is located. The “point of sale” method consists in allocating the revenue from an 
individual route operated by an air carrier to the country where the place of departure of the flight is 
located. The “point of sale” method consists in allocating the turnover to the country where the ticket 
sale occurred. The EU -wide turnovers of Virgin Atlantic, Stobart Group and Flybe Group have been 
calculated on the basis of the “point of origin” methodology. The EU turnover thresholds are also met 
under the “50/50 split” method. Virgin Atlantic’s turnover meets the EU turnover thresholds also 
under the “point of sale” method. However, since the vast majority of its bookings are made online, 
Flybe is unable to allocate its turnover on the basis of the  “point of sale” method. Stobart Group is also 
unable to allocate its turnover on the basis of the “point of sale” method since Stobart Air operates as a 
franchise carrier for Aer Lingus and the passenger sales data, including the location of the customer 
when a ticket is purchased, is collected by Aer Lingus and not provided to Stobart Air. The Parties 
estimate that the thresholds are also met under the “point of sale” method.  
29  [confidential turnover information] . 
30  Form CO, paragraph 46.  
 
12 relating to V irgin Atlantic  or Connect Airways. [confidential information about the 
transaction structure and governance ]31  
(42) The Commission ackno wledges that AFKL will have only indirect control over 
Flybe on the basis of the Commission ’s clearance decision of  12 February 2019 of 
the acquisition of joint control over Virgin Atlantic by AFKL, Delta and Virgin 
Group. However, a s concluded in that decision, AFKL acquires joint control over 
Virgin Atlantic together with Delta and Virgin Group.  
(43) With the Transaction assessed in the present decision, each of Virgin Atlantic, 
Cyrus and Stobart Aviation acquires joint control over Flybe within the meaning of 
Article 3(1)(b) of the Merger Regulation.  
(44) Consequently, AFKL post -Transaction exercises joint control over Flybe through 
an unbroken chain of control. Even if, as the Parties clai m, AFKL would, under the 
current governance structur e, not have the ability to determine business decisions 
on Flybe  in its favour , any such decisions , should they nevertheless pass,  would be 
covered by the Commission ’s clearance  decision under the Merger Regulation.  In 
line with its decisional practice in cases involving joint control, t he Commission 
will therefore take AFKL’s market position into account for the competitive 
assessment  of the Transaction at hand.   
(45) Proper examination of the competitive effects of a transaction under the Merger 
Regulation res ts in particular on a sound understanding of (i) the competitive 
constraints under which the merged entity will operate, and (ii) the specific causal 
effects of the transaction on the development of competition in the market.  
(46) Along those lines, and taking  account of the forward -looking nature of merger 
control, the Commission will first define the markets that may be relevant for the 
purpose of the competitive assessment of the Transaction  (Sections 4.1 -4.8). The 
Commission will then determine the circumstances likely to prevail on the relevant 
markets absent the Transaction , including whether the failing firm defen ce applies  
(Section 4.9 -4.10) and discuss how it will assess the competitive situation of air/rail 
overlaps for the purpose of this Deci sion (Section 4.10) .  
4.1 Air transport of passengers - O&D approach  
4.1.1 Relevance of the O&D approach  
(47) In respect of air transport services of passengers, the Commission has, in its prior 
decision practice related to air transport, defined the relevant markets f or scheduled 
passenger air transport services on the basis of two approaches: (i) the “point of 
origin/point of destination ” (“O&D ”) city -pair approach, where the target was an 
                                                 
31  Form CO, pa ragraph 355 et seq . 
 
13 active air carrier;32 and (ii) the “airport -by-airport ” approach, when the targe t held 
an important slot portfolio.33  
(48) Under the O&D approach, every combination of an airport or city of origin to an 
airport or city of destination is defined as a distinct market. Such a market 
definition reflects the demand -side perspective whereby pass engers consider all 
possible alternatives of travelling from a city of origin to a city of destination, 
which they do not consider substitutable for a different city pair. The effects of a 
transaction on competition are thus assessed for each O&D separatel y. 
(49) As a result, every combination of a point of origin and a point of destination is 
considered a separate market.34, 35 
4.1.2 Distinction between groups of passengers  
(50) The Parties submit that the Commission can leave open the question as to whether 
a distinction s hould be made between time sensitive ( “TS”) and non-time-sensitive 
(“NTS ”) passengers on short -haul routes and submit ted data not distinguishing 
between categories groups of passengers.36  
(51) The Commission has in its decisional practice (mostly  concerning  network carriers) 
considered distinguishing,  for a given O&D route, between (i)  TS or premium 
passengers who tend to travel for business purposes, require significant flexibility 
for their tickets and are willing to pay higher prices for this flexibility,  and (ii)  NTS 
or non -premium passengers who travel predominantly for leisure purposes,  do not 
require flexibility with their booking and are more price -sensitive than the first 
category.37 
(52) However, in recent decisions, the Commission has considered that the  distinction 
between TS  and NTS  passengers has become blurred. Passengers are becoming 
increasingly price -sensitive and more and more corporate customers apply lowest 
                                                 
32  See e.g. Cases M. 8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 48; M. 8869 
– Ryanair/LaudaMotion , paragraph 96; M.7541 – IAG/Aer Lingus , paragraph 14; M.7333 – 
Alitalia/Etihad , paragraph 63; M.6447 - IAG/bmi , paragraph 31.  
33  See e.g. Cases M. 8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 48; M.8869 
– Ryanair/LaudaMotion , paragraph 116, M.8672 – easyJet/Certain Air Berlin Assets , paragraph 41; 
M.8633 – Lufthansa/Certain Air Berlin Assets , paragraph 58; M.6447 – IAG/bmi , paragraph 483. For 
Cases M.8672 – easyJet/Certain Air Berlin Assets  and M.8633 – Lufthansa/Certain Air Berlin Assets , 
the Commission only carried out an airport -by-airport assessment, since the target assets did not 
consti tute an active air carrier since Air Berlin had definitively ceased its flight operations on all O&D 
markets due to its insolvency.  
34  See e.g Case M.8869 – Ryanair/LaudaMotion , paragraph 62.  
35  If follows from the O&D approach that connecting passengers a re not part of the same market as O&D 
passengers, see e.g. Case M.7333 – Alitalia/Etihad , paragraph 65.  
36  Form CO, paragraph 274.  
37  See e.g. Cases M.7333 – Alitalia/Etihad , paragraphs 70 et seq .; M.7270 – Cesky Aeroholding Travel 
Service/Ceske Aerolinie , paragraph 20 et seq .; M.6663 – Ryanair/Aer Lingus III , recital 382; M.6607 – 
US Airways/American Airlines , paragraph 8; M.6447 – IAG/bmi , paragraph 36.  
 
14 fare policies. Moreover, on short -haul flights, the distinction between TS and NTS 
has be come somewhat artificial, as the offerings for TS and NTS passengers on 
these routes  have become very similar. The transportation of both c ategories  of 
passengers  usually  takes  place  in the same  cabin and  further  product differentiation 
(e.g. included meal s, newspapers and magazines) are mostly  also available to NTS  
passengers for an upgrade fee.  The Commission found that it was not appropriate 
on short -haul routes to define separate markets for TS and NTS and instead 
considered a market comprising all pass engers.38 
(53) In this context, the Commission notes that the relevant routes for the purpose  of the  
competitive  assessment  of the Transaction are all  short -haul routes, with Flybe 
operating only a single cabin.39 
(54) Moreover, the market investigation has not produced  evidence indicating that the 
Commission should depart from the approach  it has recently  taken  in respect  of 
short -haul routes. In particular, respondents have not submitted material comments 
suggesting  that there is  any need to define separate mar kets for the different 
categories of passengers for the purpose of analysing the Tra nsaction.40 
(55) In the light of the above, the Commission concludes that, for the purposes of the 
Transaction, it is not appropriate to define separate markets for different cat egories 
of passengers, whether according to the distinction between TS and NTS 
passengers .  
4.1.3 Distinction between direct and indirect flights  
(56) On a given O&D pair, passengers can travel by way of a direct flight between the 
point of origin and the point of destination or by way of an “indirect ” flight on the 
same O&D pair via an intermediate destination.41 
(57) In previous cases, the Commission conside red that the substitutability between 
direct and indirect flights on a route -by-route basis depends on various factors, 
including notably the flight duration, but also price considerations or the 
inconvenience associated with the indirect flight. In particular, with regard to short -
haul routes (generally below 6 hours flight duration) it was considered that indirect 
flights  do not generally provide a competitive constraint to direct flights ab sent 
exceptional circumstances, for example , the direct connection does not allow for a 
                                                 
38  See e.g. Case M. 8869 – Ryanair/LaudaMotion , paragraph 138 et seq .; M.7541 – IAG/Aer Lingus , 
paragr aph 28; M.6663 – Ryanair/Aer Lingus III , paragraph 387.  
39  Form CO, paragraph 274.  
40  Replies to eQ1 – Questionnaire to Airlines, question 66; eQ2 – Questionnaire to Corporate Customers, 
question 17 and eQ3 – Questionnaire to Travel Agents, question 18.  
41  See e.g. Cases M. 8361 – Qatar Airways/Alisarda/Meridiana , paragraph 24; M. 7541 – IAG/Aer 
Lingus , paragraph 30; M.7333 – Alitalia/Etihad , paragraph 75; M.6663 – Ryanair/Aer Lingus III , 
paragraph 373.  
 
15 one-day return trip or the share of indirect flights in the overall market is 
significant.42  
(58) The Parties submit that, should direct and indirect flights be considered 
substitutable, the Transaction gives rise to 22 affected direct/indirect overlap 
routes.43 The Parties consider that the indirect services do not provide a 
competitive constraint on the direct service  on the direct/indirect overlap routes .44  
(59) However, on 10 r outes, also the share of indirect flights in both seasons is 
significant, i.e. higher than [10-20]%.45 On 20 of the 22 direct/indirect overlap 
routes, the direct flight does not allow for a one -day return trip. Therefore, the 
criterion of exceptional circum stances would in principle be fulfilled . 
(60) It can however be left open if direct and indirect flights are substitutable in this 
case as the Transaction would not raise serious doubts as to its compatibility with 
the internal market under any plausible market  definition  as assessed in Section 
5.1.1.6  below . 
4.1.4 Airport substitutability   
4.1.4.1  Analytical framework  
(61) When defining the relevant O&D markets for passenger air transport services, the 
Commission has previously found that flights to or from airports with sufficiently 
overlapping catchment areas can be considered as substitutes in the eyes of 
passengers (particularly if the airports serve the same main city). In order to 
correctly capture the competitive constraint that flights to or from two different 
airports exert on each other, a detailed analysis taking into consideration the 
specific characteristics of the relevant airports is necessary.46 
(62) The evidence used to characterise airport substitutability includes inter alia a 
comparison of actual distances and  travelling times to the indicative benchmark of 
                                                 
42  See e.g. Cases M. 8361 – Qatar Airways/Alisarda/M eridiana , paragraph 25; M. 7541 – IAG/Aer 
Lingus , paragraph 32; M.7333 – Alitalia/Etihad , paragraph 77; M.6663 – Ryanair/Aer Lingus III , 
paragraph 375.  
43  These are the following routes: BER -BHX, BER -CWL, BES -BHX, BHX -HAJ, BHX -HAM, BHX -
MIL, BHX -NTE, BHX -STR, BHX -TLS, BUD -HUY, CWL -DUS, CWL -GVA, CWL -MUC, CWL -
ROM, CWL -VCE, GVA -SOU, HAJ -MAN, HUY -VCE, INV -AMS, LUX -MAN, LYS -SOU, MAN -
TLS.  
44  Form CO, paragraph 540.  
45  See Cases M.2672 – SAS/Spanair , paragraph 15 and M.3280 – Air France/KLM , paragraph 80. See 
also e.g. Cases M.7541 – IAG/Aer Lingus , paragraphs 151 et seq . and M.7333 – Alitalia/Etihad , 
paragraphs 171 et seq ., for the filters applied by the Commission for direct/indirect overlap routes to 
exclude likely unproblematic routes from the scope of its investigation, for example short -haul routes 
where the total share of indirect operations in the relevant market wa s below 10%.  
46  See e.g. Cases M.8361 – Qatar Airways/Alisarda/Meridiana , paragraph 29; M.7333 –Alitalia/Etihad , 
paragraph 82; M.6663 – Ryanair/Aer Lingus III , paragraph 65.  
 
16 100 km/1 hour driving time,47 the outcome of the market investigation (views of 
the competitors and other market participants), and the competitors’ practices in 
terms of monitoring of competition.  
(63) In the pre sent case, taking account of the relevant routes where the Parties’ 
activities overlap, the question of airport substitutability arises for the routes to or 
from the following cities: Paris, Birmingham , London and Manchester.  
(64) Conversely , for the purpose o f this Decision, the question of airport substitutability  
is not relevant for Berlin, Due sseldorf and Milan.48  
4.1.4.2  Assessment of airport substitutability  
4.1.4.2.1  Paris  
(65) Paris has two main airports, namely Paris Charles de Gaulle (CDG) and Paris Orly 
(ORY). Paris is als o served by Beauvais airport (BVA).  
(66) In its prior decision practice, the Commission has considered ORY and CDG as 
substitutable airports, but ultimately left the question open.49 The Commission has 
also considered whether CDG and BVA were substitutable.50 
(67) The Notifying Parties do not contest the Commission’s approach and have 
provided a competitive assessment for e ach plausible airport pair.51  
(68) For the purposes of the O&D assessment of the Transaction, the question of airport 
substitutability is relevant for t he following direct/direct overlap routes: Paris -
Manchester, Paris -Birmingham and Paris -Edinburgh.  
                                                 
47  The 100 km/1 hour driving time is nevertheless used as a first proxy only. It was defined by the 
Commission in the specific case of routes served out of Dublin by two airlines with typical attributes 
of low -frills point -to-point carriers. This "rule" is th us not necessarily strictly applicable for other cases 
(see Case M.6663 – Ryanair/Aer Lingus III , paragraph 82). In this regard, in "Airport Competition: 
Myth or Reality? IATA Economics Briefing", November 2017, it is noted that "[w]hile isochrones are 
a simple and powerful visual tool, they are of limited use in understanding the choices that passengers 
actually make. (…) Moreover, the proximity of an alternative airport can only represent a relevant 
choice if the airlines which compete with each other off er a substitutable service, for instance a 
comparable itinerary. Isochrone maps do not reflect the availability of services at comparator airports 
and are therefore likely to overstate the extent of effective airport competition."  
48  Berlin, Due sseldorf an d Milan are cities where the Parties are active and which are served by several 
airports. Nevertheless, the question of airport substitutability does not arise given that the Parties only 
operate the affected routes to/from the same airport (nam ely Berlin Tegel, Due sseldorf and Milan 
Malpensa airports). As a result, the market shares of the Parties would be the same or lower when 
taking account of competitor s’ flights from the other hypothetically substitutable airports. Therefore, 
should the Commission tak e account of potential substitutable airports, the outcome of the competitive 
assessment would remain unchanged.  
49  In case M.5830 – Olympic/Aegean Airlines , paragraph 1676 , the Commission concluded that CDG and 
ORY are substitutable for TS and NTS passen gers on the Athens -Paris route.  
50  In case M.4439 – Ryanair/Aer Lingus , paragraph 163, the Commission concluded that CDG and BVA 
belonged to the same market for flights to Dublin.  
51  Form CO, paragraph 297.  

 
18 diverge, making it difficult to draw conclusions .57 While the majority of  travel 
agents offer flights to and from the two airports to their customers, corporate 
customers’  replies as to whether they choose flights to/from either CDG and ORY 
airpo rts are  diverging .58 
(75) The outcome of the market investigation is therefore inconclusive with respect to 
the substitutability of CDG and ORY on the routes Paris -Birmingham and Paris -
Edinburgh.  
(76) In any event , for the purpose of the assessment of the effects of  the Transaction 
under the O&D approach , the question whether flights to and from Paris  Charles de 
Gaulle airport and Paris Orly airport belong to the same market can be left open , as 
the competitive assessment would remain unchanged, under any plausible m arket 
definition.  
4.1.4.2.2  Birmingham  
(77) The city of Birmingham is served by two main airports, namely Birmingham 
airport (BHX) and East Midlands Airport (EMA) . 
(78) In its prior decision al practice , the Commission has considered whether passenger 
air transport services  to and from Birmingh am comprised flights  from and to  BHX 
and EMA.  While the Commission considered that BHX and EMA were 
substitutable with respect to the Birmingham -Knock route, the Commission left 
open whether BHX and EMA were substitutable with respect to the Birmingham -
Dublin route.59  
(79) The Notifying Parties do not contest the Commission’s approach and have 
provided  a competitive assessment for each plausible airport pair.60  
(80) For the purposes of the O&D assessment of the Transaction, the question of airport 
substitutability is relevant for the following direct/direct overlap routes: 
Birmingham -Amsterdam and Birmingham -Paris. The question of airport 
substitutability is also relevant for direct/indirect overlap routes61 and air/rail 
overlaps.62  
                                                 
57  Replies to eQ1 – Questionnaire to Airlines, question 9.  
58  Replies to eQ2 – Questionnaire to Corporate Customers, question 6 and eQ3 – Questionnaire to Travel 
Agents, question 7.  
59  In case M.6333 – Ryanair/Aer Lingus III , paragraph 174.  
60  Form CO, paragraph 303.  
61  Those are  routes between (i) Birmingham and (ii) Brest, Nantes, Berlin, Hannover, Hamburg, Stuttgart 
and Milan. For completeness, the route Birmingham -Toulouse used to be an overlap route but has been 
exited by Flybe prior to and indepen dently from the Transaction.  
62  Those are routes between (i) Birmingham and (ii) Edinburgh and Glasgow.  

 
20 (86) In any event , for the purpose of the assessment of the effects of the Transaction 
under the O&D approach , the question whether flights to and from Birmingham 
airport and East Midlands airport  belong to the same marke t can be left open as the 
competitive assessment woul d remain unchanged, under any plausible market 
definition.  
4.1.4.2.3  London  
(87) London has six main airports, namely Heathrow (LHR), Gatwick (LGW), City 
(LCY), Stansted (STN), Luton (LTN) and Southend (SEN).  
(88) In previous decisions, the Commission has considered whether short -haul flights to 
and from London would comprise flights to and from (i) each airport individually, 
(ii) LHR, LGW, LCY, LTN and STN ( “London(five) ”) airports, or (iii) LHR, 
LGW, LCY, LTN, STN and SEN ( “London(six) ”) airports. With respect to 
London(fiv e), the Commission left the question open whether they are substitutable 
in case M.6447 – IAG/bmi .70 With respect to London(six), the Commission 
considered that the six airports were substitutable with respect to routes to/from 
Dublin and Belfast.71 
(89) The Notifying Parties do not contest the Commission’s approach and have 
provided a competitive assessment for each plausible airport pair.72  
(90) For the purposes of the O&D assessment of the Transaction, the question of airport 
substitutability is relevant for the one  direct/direct overlap route, namely London -
Amsterdam. The question of airport substitutability is also relevant for one air/rail 
overlap route, namely London -Edinburgh.  
(91) On the London -Amsterdam route, Flybe and AFKL operate direct services to/from 
LCY. AFK L also operates direct services to/from LHR. None of Virgin Atlantic, 
Delta or Stobart Air operated on this route.73 
(92) On the London -Edinburgh route, Flybe operates an air service from LHR and LCY 
while Virgin Trains operates a rail service from London Euston  Station.74 
(93) The travel distances and times between Heathrow, Gatwick, City, Stansted, Luton 
and Southend airports and the centre of London are summarised below:  
 
                                                 
70  For instance, in case M.6447 – IAG/bmi , paragraph 58, the Commission considered but ultimately left 
open the question whether London(five) airports be long to the same market with respect to short -haul 
domestic and European routes such as London -Manchester, London -Nice or London -Basel.  
71  In case M.7541 – IAG/Aer Lingus , paragraph 74.  
72  Form CO, paragraph 293.  
73  Form CO, paragraphs 423 -426. 
74  Form CO, paragraph 561.  

 
22 (96) In any event , for the purpose of the assessment of the effects of the Transaction 
under the O&D approach , the question whether flights to and from London(five) o r 
London(six) airports belong to the same market can be left open because the 
Transaction would not raise serious doubts as to its compatibility with the internal 
market, under any plausible market definition.  
4.1.4.2.4  Manchester  
(97) The city of Manchester  is served by  three airports, namely Manchester (MAN), 
Liverpool John Lennon (LPL), and Leeds -Bradford (LBA) airports.  
(98) In its prior decisional practice relating to short -haul services to or from Manchester, 
the Commission examined the effects of the notified transactio n on markets 
comprising flights to and from MAN, LPL and LBA, but left the exact market 
definition open.79 
(99) The Notifying Parties do not contest the Commission’s approach and have 
provided a competitive assessment for each plausible airport pair.80  
(100)  For the p urpose of the O&D assessment of the Transaction, the question of airport 
substitutability is relevant for the following direct/direct overlap routes: 
Manchester -Amsterdam and Manchester -Paris. This question is also relevant for 
direct/indirect overlaps, in direct/indirect overlaps and air/rail overlap routes.  
(101)  On the Manchester -Amsterdam route, Flybe and AFKL operate direct services to 
and from MAN. easyJet also offers a direct flight on this airport pair. In addition, 
AFKL operates direct services to and fro m LBA. Virgin Atlantic, Delta and Stobart 
Air do not operate on this city pair.81 
(102)  On the Manchester -Paris route, Flybe and AFKL operate direct services to and 
from MAN. easyJet operates on this route to and from (i) MAN and (ii) LPL. 
Virgin Atlantic, Delta and Stobart Air do not operate on this city pair.82  
(103)  The travel distances and times between MAN, LPL and LBA and the centre of 
Manchester are summarised below.  
 
 
                                                 
79  See e.g. Case M.6663 – Ryanair/Aer Lingus , paragraph 241 for the Manchester -Dublin route.  
80  Form CO, paragraph 300.  
81  Form CO, paragraph 437.  
82  Form CO, paragraph 505.  

 
24 considered in cases where alternative modes of transport on the respective O&D 
route can be considered comparable in terms of price, quality and (global) travel 
time and can therefore be considered valuable alternatives by cust omers.87  
(108)  The question of substitutability of train transport services with air transport services 
is relevant in this case for the London -Edinburgh, Birmingham -Glasgow, 
Birmingham -Edinburgh, Edinburgh -Manchester and Glasgow -Manchester routes.  
On those rout es, Flybe operates an air passenger transport service . Virgin Trains  is 
operating the West Coast Rail Franchise, which includes train services between 
London Euston, the West Midlands, North Wales, Manchester, Liverpool, 
Edinburgh and Glasgow .88 
(109)  The Parties  submit that the market definition can be left open as no competition 
concerns would arise.89 
(110)  The UK Competition and Markets Authority  (“CMA ”), when assessing rail 
franchises, takes rail travel as a starting point and considers which other modes of 
transport to include in its market definition. In this regard, the CMA takes into 
account (a) the cost of the journey; (b) journey time; (c) time spent travelling to and 
from the starting point of the journey (for public transport); and (d) frequency and 
waiting time .90 In previous cases, the CMA concluded for the London -Edinburgh 
and London -Glasgow that air services exert a competitive constraint on the rail 
services on this flow whereas it was considered that air services did not sufficiently 
constrain tra in services on the London -Exeter flow.91 
(111)  The Parties have explained that on Birmingham -Glasgow, Birmingham -Edinburgh, 
Edinburgh -Manchester and Glasgow -Manchester  routes [strategic information on 
Flybe’s price monitoring] .92 
(112)  From a supply -side perspective, the majority of airlines operating intra -UK routes 
and expressing their views, explained that they do not monitor rail services.93  
                                                 
87  See e.g. Cases M.6447 – IAG/bmi , paragraph 75.  
88  Form CO, paragraph 249 and 552.  
89  Form CO, paragra ph 558.  
90  See CMA Rail franchise mergers: Review of methodologies and guidance, para 4.3, 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment data/file/6527
49/rail -franchises -review -of-methodologies -and-guidance.pdf . 
91  See decision Inter City Railways Limited/ICEC Franchise (2014), paragraphs 80 -88 and 95 -100, 
https://assets.publishing.service.gov.uk/media/54f9947be5274a1417000007/ICRL -
ICEC Full text decision v2.pdf  and decision  First MTR South Western Trains Limited/South 
Western Franchise (2017), paragraphs 98-99, 
https://assets.publishing.service.gov.uk/m edia/5975f6c240f0b649a7000012/swt -firstgroup -mtr-slc-
decision.pdf .  
92  Form CO, paragraph 572, 578, 587, 593.  
93  See replies to eQ1 – Questionnaire to airlines, question 10 and 11.  
 
25 (113)  From a demand -side perspective, the travel agents having expressed their view 
gave mixed replies as to whether passengers consi der rail services as an alternative 
to air transport within the UK and only around half of those travel agents explained 
that they also offer train tickets to their customers.94 When asked if they consider 
train services as an alternative to air transport with regard to the five air/rail 
overlaps, only a minority of corporate customers having expressed their views 
answered in the negative .95 When asked if they purchase train tickets  for the five 
air/rail overlaps, the majority of corporate customers having expressed a view 
explained that they purchase train tickets .96 One customer explained that “Rail 
travel between London to Edinburgh is utilised due to the availability of an 
overnig ht sleeper service. The other routes are three to four hours each way so in 
terms of overall journey time, taking into account clearing airport security etc., 
there is no significant time difference. Rail journeys account for approximately 
25% of the Londo n to Edinburgh route and 50% of the other routes (versus air 
travel). ”97 
(114)  When asked which criteria would make customers choose rail services  over air 
transport , respondents to the Commission’s market investigation identified most 
frequently price difference  and total travel duration, followed by schedules , but 
also mentioned other criteria. For example , one customer explained that “[…] 
travellers can be more productive during train versus air travel due to the 
improved travel conditions. Encouraging rail tra vel helps with environmental 
targets. ”98  
(115)  In any event , for the purposes of this Decision,  the Commission considers that the 
question whether air and rail transport services are substitutable on the London -
Edinburgh, Birmingham -Glasgow, Birmingham -Edinburgh , Edinburgh -Manchester 
and Glasgow -Manchester routes can be left open, as the Transaction would not 
raise serious doubts as to its compatibility with the internal market under any 
plausible market definition.  
4.1.6 Relevance of the market for air transport servi ces to tour operators  
(116)  Carriers, both charter and scheduled airlines, may sell seats (or entire flights) to 
tour operators, which then integrate the flights into package holidays or resell  only 
seats to end customers.  
(117)  In prior decisions, the Commission has  regarded the wholesale supply of airline 
seats to tour operators as a distinct market from the supply of scheduled air 
                                                 
94  See replies to eQ3 – Questionnaire to travel agents, question 8 and 9.  
95  See replies to eQ2 – Questionnaire to corporate customers, question 7 and 8.  
96  See replies to eQ2 – Questionnaire to corporate customers, question 8.  
97  See replies to eQ2 – Questionnaire to corporate customers, question 8.  
98  See replies to eQ1 – Questionnaire to airlines, question 13; eQ2 – Questionnaire to corporate 
customers, question 9 and eQ3 – Questionnaire to travel agents, question 10.  
 
26 transport services to end customers.99 From a demand -side perspective, tour 
operators have different requirements from those of individual passengers (for 
example, purchase of large seat packages in advance from the start of the season or 
negotiation of rebates).100 
4.1.6.1  Parties’ views  
(118)  The Parties consider that Flybe is only […] in the wholesale supply of seats to tour 
operators, and, th erefore, it is not necessary to consider this market any further.101   
4.1.6.2  Commission’s assessment  
(119)  The Commission considers that, for the purpose of assessing the horizontal effects 
of the Transaction, the supply of airline seats to tour operators only constitut es a 
meaningful market on routes where either Flybe or Virgin Atlantic (or its parents, 
in particular AFKL) are active to a significant extent.102  Indeed, in the absence of 
any (material) overlap, the market for the supply of airline seats to tour operators 
cannot be considered as meaningful for the purpose of the Transaction. Therefore, 
this market is not considered as a relevant market and will not be further assessed 
in this decision.  
4.2 Air transport of passengers – Airport -by-airport approach  
4.2.1 Relevance of the airport -by-airport approach  
(120)  Under the airport -by-airport approach, every airport (or substitutable airports) is 
defined as a distinct market. Such a market definition has notably been adopted to 
assess the risks of foreclosure entailed by the concentra tion of slots at certain 
airports in the hands of a single undertaking.103 Under this approach, the effects of a 
transaction on competition are thus assessed for all O&Ds taken together to or from 
an airport (or substitutable airports).  
                                                 
99  See e.g. Cases M.8046 – TUI/Transat France , paragraphs 66 -88; M.5867 – Thomas Coo k/Öger Tours , 
paragraph 14 -16; M.4601 – KarstadtQuelle/MyTravel , paragraphs 39 -43; M.4600 – TUI/First Choice , 
paragraph 52 -57; M.3770 – Lufthansa/Swiss , paragraph 20.  
100  Decision of 27 February 2013, case M.6663 – Ryanair/Aer Lingus III , paragraph 409.  
101  Form CO, paragraph 551 and response to QP7 of 30 April 2019, question 9.  
102  In the absence of data on the total size of the market for supply of airline seats to tour operators, the 
Commission considers that Flybe (or Virgin Atlantic and its parents, in particular AFKL) can be 
considered as only […] on that market when the number of seats sold to tour operators represents less 
than [0-5]% of the number of seats sold by Virgin Atlantic and its parents, in particular AFKL (or 
Flybe when relevant). See also Case M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , 
paragraph 44.  
103  See e.g. Case M.8633 – Lufthansa/Certain Air Berlin Assets , paragraphs 164 et seq . 
 
27 4.2.1.1   Introduction  
4.2.1.1.1  Slots as an input for air transport services  
(121)  By virtue of the Slot Regulation,104  slots, i.e. the permission to land and take -off at 
a specific date and time at congested airports, are essential for airlines ’ operations. 
Indeed, only air carriers holding slots are  entitled to get access to the airport 
infrastructure services delivered by airport managers and, consequently, to operate 
routes to or from those airports.  
(122)  The Commission has, in its prior decision practice, highlighted that the lack of 
access to slots c onstitutes a significant barrier to entry or expansion at Europe ’s 
busiest airports, such as London Heathrow airport.105   
(123)  The Commission has also insisted, in the framework of its airport policy, that 
“slots are a rare resource ” and “access to such resources  is of crucial importance 
for the provision of air transport services and for the maintenance of effective 
competition .”106   
(124)  In addition, the Slot Regulation recalls that, with the increase of air traffic, there is 
a continuously growing demand for capacity at congested airports.107 Therefore, 
the lack of available slots has become a prominent feature of the EU airline 
industry and is expected to become an even more critical issue for air carriers in the 
near future.  
4.2.1.1.2  Rules for the allocation of slots  
(125)  In the con text of the imbalance between demand and supply of airport capacity, the 
Slot Regulation defines the rules for the allocation of slots at EU airports. It aims to 
ensure that, where airport capacity is scarce, the latter is used in the fullest and 
most effi cient way and slots are distributed in an equitable, non -discriminatory and 
transparent way.  
(126)  Under the Slot Regulation, the general principle regarding slot allocation is that an 
air carrier having operated its particular slots for at least 80% during the summer or 
winter scheduling period is entitled to the same slots in the equivalent scheduling 
period of the following year (the “grandfather rights ”).108 Conversely, slots which 
                                                 
104  Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation  of slots at 
Community airports (the “Slot Regulation”).  
105  See e.g. Cases M.7541 – IAG/Aer Lingus , paragraphs 188 et seq .; M.6447 – IAG/bmi , paragraphs 174 
and 663.  
106  Recital (4) of the Commission Proposal for a Regulation of the European Parliament and  of the 
Council on common rules for the allocation of slots at European Union airports (COM/2011/827 final 
of 01 December 2011).  
107  Slot Regulation, first recital: “Whereas there is a growing imbalance between the expansion of the air 
transport system in E urope and the availability of adequate airport infrastructure to meet that 
demand; whereas there is, as a result, an increasing number of congested airports in the Community .” 
108  Slot Regulation, Article 8(2).  
 
28 are not sufficiently used by air carriers (below 80%) are reallocated to other a ir 
carriers (the “use it or lose it ” rule).  
(127)  The Slot Regulation also provides for the setting up of “slot pools ” containing 
newly -created time slots, unused slots and slots which have been given up by a 
carrier or have otherwise become available (e.g. via the “use it or lose it ” rule). 
50% of the slots from the slot pool shall first be offered to new entrants. The other 
50% of the slots from the slot pool shall be placed at the disposal of other applicant 
airlines (incumbent airlines). If applications by ne w entrants amount to less than 
50% of the capacity made available through slots from the slot pool, this remaining 
capacity shall also be placed at the other applicants ’ disposal.109 
(128)  Under the Slot Regulation, slots cannot be traded. They may however be 
exch anged or transferred between airlines in certain specified circumstances and 
subject to the explicit confirmation from the coordinator under the Slot 
Regulation.110 
4.2.1.2  The Notifying Parties’ views  
(129)  The Notifying Parties state that the airport -by-airport approac h “may have been 
necessary in the circumstances of these decisions where the O&D approach may 
have failed to capture all of the structural effects on competition brought about by 
the transaction. By contrast, in circumstances where the effects of the trans action 
can effectively be assessed by reference to relevant O&D markets, the parties do 
not consider that it is necessary to also consider these same effects on an airport -
by-airport approach. ”111 The Parties do not consider it necessary to reach a 
conclusio n regarding the relevance of the airport -by-airport approach because they 
consider that no competition concerns would arise from assessing the transaction 
under the airport -by-airport approach.112 
4.2.1.3   Commission’s assessment  
(130)  According to the Explanatory Memora ndum for the Commission Proposal for a 
Regulation of the European Parliament and of the Council on common rules for the 
allocation of slots at European Union airports,113 “the emergence of a strong 
competitor at a given airport requires it to build up a sust ainable slot portfolio to 
allow it to compete effectively with the dominant carrier (usually the “home ” 
carrier). ”  
                                                 
109  Slot Regulation, Article 10(6).  
110  The coor dinator is the person responsible for the allocation of slots (Slot Regulation, Article 4(5)). 
According to the first sentence of Article 8a(2) of the Slot Regulation, “[t]he transfers or exchanges 
referred to in paragraph 1 shall be notified to the coordi nator and shall not take effect prior to the 
express confirmation by the coordinator.”  
111  Form CO, paragraph 269.  
112  Form CO, paragraph 703.  
113  COM/2011/827 final of 01 December 2011.  
 
29 (131)  In this context, in a number of prior decisions related to transactions entailing the 
transfer of slots at certain airports, the Commission has considered the effects of 
the transaction on the operation of passenger air transport services at a given airport 
in terms of the slot portfolio held by a carrier at the airport, without distinguishing 
between the specific routes served to or from that  airport.114  Under this approach, 
the Commission assesses how the transaction strengthens the merged entity ’s 
position at certain airports and the potential effects thereof on the merged entity’s 
ability and incentive to foreclose other air carriers from acc essing the relevant 
airport  infrastructure service s. Foreclosing access to airport  infrastructure  service s 
may in turn foreclose those other air carriers from operating routes from/to the 
relevant airports.115 
(132)  In this respect, the Commission notes that the O&D approach and the airport -by-
airport approach are complementary and not mutually exclusive. In cases where the 
transaction involves the acquisition of an active air carrier and brings about a 
transfer of slots, it is appropriate to conduct an analysis u nder both approaches for a 
full competitive assessment of the transaction.  
(133)  In the present case, Flybe, Stobart and Virgin Atlantic (or its parents AFKL, Delta 
and Virgin Group) have overlapping slot portfolios at 29 coordinated (Level 3) 
airports, includin g Amsterdam Schiphol and Paris Charles de Gaulle airport.116 The 
potential effects resulting from this overlap are not fully covered by the O&D 
approach.  
(134)  Therefore, in view of the above, the Commission considers it appropriate, for the 
purpose of this Decisi on, to apply the analytical framework designed to address the 
risk of foreclosure from access to airport infrastructure services  and air transport of 
passengers to and from the relevant airports,  potentially resulting from the 
acquisition of joint control over Flybe, at airports where the slot portfolio of Virgin 
Atlantic (including Virgin Atlantic’s parent companies) and Stobart Group 
overlapped with the slot portfolio of Flybe, in Winter 2018/2019 and/or Summer 
2018 IATA Seasons.117 
                                                 
114  See e.g. Cases M.8869 – Ryanair/LaudaMotion , paragraph 116; M.8672 – easyJet/Certain Air Berlin 
Assets , paragraph 41; M.8633 – Lufthansa/Certain Air Berlin Assets , paragraph 58; M.6447 – 
IAG/bmi , paragraph 483.  
115  See e.g. Cases M.8869 – Ryanair/LaudaMotion , paragraph 506 et seq. ; M.8672 – easyJet/Certain Air 
Berlin Assets , paragraph 91 et seq .; M.8633 – Lufthansa/Certain Air Berlin Assets , paragraph 160 et 
seq.; M.6447 – IAG/bmi , paragraph 483.  
116  Those are: Alicante (ALC), Amsterdam (AMS) , Arlanda (ARN), Birmingham (BHX), Bristol (BRS), 
Paris Charles de Gaulle (CDG), Dub lin (DUB), Duesseldorf (DUS), Göteborg Landvetter (GOT), 
Geneva (GVA), Hannover (HAJ), Hamburg (HAM), Innsbruck (INN), London City (LCY), Gatwick 
(LGW)), Lyon -Saint -Exupery (LYS), Manchester (MAN), Munich (MUC), Milano Malpensa (MXP), 
Nice Côte d’Azur (NCE ), Palma de Mallorca (PMI), Prague (PRG), London Stansted (STN), Stuttgart 
(STR), Trondheim (TRD), Berlin -Tegel (TXL), Venice (VCE), Vienna (VIE) and Zürich (ZRH) 
airports. Flybe does not have any historic rights on slots at London Heathrow airport. It ope rates on the 
basis of slots released by IAG under the commitments in Case M.6447 – IAG/bmi  and slot leases 
agreements with Virgin Atlantic.  
117  Pre-Transaction, Cyrus or any entity controlled by it does not hold slots.  
 
30 (135)  The Commission will cons ider below the various possible delineations of these two 
relevant markets under the airport -by-airport approach  (i.e. the markets for air 
transport services of passengers to or from the relevant airports and the market for 
airport infrastructure services provided at the relevant airports) . 
4.2.2 Relevant markets  for the assessment of the effects of the Transaction on 
passenger air transport services under the airport -by-airport approach  
4.2.2.1  Air transport services of passengers to or from the relevant airports  
4.2.2.1.1  Releva nt product market  
(136)  In prior decisions, when applying the airport -by-airport approach, the Commission 
has not deemed it necessary to consider the same distinctions as those considered 
when each O&D market is examined separately (e.g. time sensitive vs. non -time 
sensitive passengers, direct vs. indirect flights, charter flights vs. scheduled flights, 
wholesale vs. retail supply of airline seats).118 On the basis of the information in 
the file, the Commission considers that there are no grounds for it to deviate from 
this past practice for the purposes of this Decision.  
4.2.2.1.2  Relevant geographic market  
(137)  In prior decisions, the Commission has considered whether the relevant airports 
were substitutable with other airports in view of their overlapping catchment 
areas.119 
(138)  With  respect to the overlap airports where the question of a broader geographic 
scope encompassing several airports might be relevant, the Commission will focus 
its assessment of airport substitutability where the Parties would have a slot 
holding above 20% on  average  at a specific airport or at a combination of airports 
within the same catchment area, considering that a combined average slot holding 
below 20% is unlikely to give the Parties the ability to foreclose access to the 
market for the provision of pas senger air transport services. A s explained in section 
5.1.2.3  below , the only airport where the Parties  and the Target Companies  would 
have a combined slot holding above 20% and where the question of airport 
substitutability would be relevant is Paris Cha rles de Gaulle airport . Therefore, he 
Commission will assess whether Paris Charles de Gaulle is substitutable with other 
airports within the same catchment area.  
(139)  In the present case, the substitutability from the point of view of passengers of 
Paris Charle s de Gaulle, Paris Orly and Beauvais has already been considered in 
section 4.1.4.2  above , and the Commission considered that Paris Charles de Gaulle 
and Paris Orly might be considered as substitutable with respect to the relevant 
overlap routes but ultima tely left the question open . 
                                                 
118  See Cases M.8964 – Delta/Air Fran ce-KLM/Virgin Group/Virgin Atlantic , paragraph 128; M.8869 – 
Ryanair/LaudaMotion , paragraph 222; M.8672 – easyJet/Certain Air Berlin assets , paragraph 52; 
M.8633 – Lufthansa/Certain Air Berlin assets , paragraph 58; M.6447  IAG/bmi , paragraphs 492 -506. 
119  See Cases M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 129 -130; 
M.8869 – Ryanair/LaudaMotion , paragraphs 223 -226 ; M.8672 – easyJet/Certain Air Berlin assets , 
paragraphs 53 et seq .; M.8633 – Lufthansa/Certain Air Berlin assets , paragraphs 59 et seq.  
 
31 4.2.2.1.3  Conclusion  
(140)  For the purpose of its airport -by-airport assessment of the Transaction in this 
Decision, the Commission will assess the competitive effects of the Transaction on 
the markets for the provision of passenger air transp ort services, encompassing all 
routes to or from an airport, or to or from substitutable airports.  
(141)  For the purpose of its airport -by-airport assessment of the Transaction in this 
Decision, the question of whether the relevant geographic market consists of flights 
to/from Paris Charles de Gaulle only or Paris Charles de Gaulle and Paris Orly can 
be left open, as the Transaction would not raise serious doubts as to its 
compatibility with the internal market under either plausible market definition (see 
sectio n 5.1.2. below).  
4.2.2.2  Airport infrastructure services  
(142)  For the purpose of providing passenger air transport services at congested airports, 
airlines have to source infrastructure services at those airports. As indicated in 
section 4.2.1.1  above, at congested air ports, infrastructure capacity is managed 
through the allocation of slots, which enable air carriers to fly to and from the 
airports. A slot is  therefore defined, from the point of view of airports, as “a 
planning tool for rationing capacity at airports wh ere demand for air travel 
exceeds the available runway and terminal capacity. ”120 From the point of view of 
airlines, the granting of a slot at an airport means that the airline may use the entire 
range of infrastructure necessary for the operation of a flig ht at a given time 
(runway, taxiway, stands and, for passenger flights, terminal infrastructure). This in 
turn enables the airlines to provide passenger air transport services to and from that 
airport.  
(143)  As a consequence, through the Transaction and the comb ination of slot portfolios, 
the Parties together obtain a right of access to a higher share of airport 
infrastructure capacity. The Transaction therefore has an impact on (the demand -
side of) the markets for airport infrastructure services at the relevant airports and 
also on the markets for passenger air transport to and from those airports.  
(144)  In addition, Stobart Aviation is active in the provision of airport infrastructure 
services. Stobart Aviation owns (i) London Southend airport ( “SEN ”), (ii) Carlisle 
Lake District airport ( “Carlisle ”) and (iii) a minority controlling stake in Durham 
Tees Valley airport ( “DTVA ”).121 The Transaction could therefore give rise to 
vertical links between Stobart Aviation’s activities in the upstream market for 
airport infrastru cture services and the activities of Flybe in the downstream market 
for the provision of passenger air transport services.  
4.2.2.2.1  Relevant product market  
(145)  The Commission has, in its prior decisional practice, delineated a product market 
for the provision of airpor t infrastructure services to airlines, which includes the 
                                                 
120  Press release of 1 December 2011 accompanying the Airport Package ( http://europa.eu/rapid/press -
release MEMO -11-857 en.htm ).  
121  Form CO, paragraphs 1441 and 1461 .  
 
32 development, maintenance, use and provision of the runway facilities, taxiways and 
other airport infrastructure.122 
(146)  In cases where the Transaction could give rise to horizontal overlaps, t he 
Commissio n has considered sub -dividing the market for airport infrastructure 
services on the basis of airline customers (i.e. charter operators, scheduled full 
service carriers and scheduled low cost carriers) and on the basis of the type of 
flights (i.e. short -haul and long -haul).123 
(147)  In prior decisions relating to the transfer of slots at airports, the Commission has 
not considered it appropriate to further distinguish within the market for airport 
infrastructure services, considering that slot portfolios give access  to all 
infrastructure services necessary to operate at the airport. The Commission 
considers that there is no element in the file that would require deviating from the 
Commission ’s past practice for the purposes of this Decision  with respect to the 
assess ment of the effects of the Transaction on passenger air transport under the 
airport -by-airport approach . 
(148)  In prior decisions where the transaction could give rise to vertical links, the 
Commission has not considered it appropriate to further distinguish wit hin the 
market for airport infrastructure services, considering that slot portfolios give 
access to all infrastructure services necessary to operate at the airport.124 The 
Commission considers that there is no element in the file that would require 
deviating from the Commission ’s past practice for the purposes of this Decision 
with respect to the assessment of the vertical effects of the Transaction.125 
4.2.2.2.2  Relevant geographi c market  
(149)  In its prior decisional practice, the Commission has, defined the geographic scope 
of the market for airport infrastructure services as the catchment area of individual 
airports.  
(150)  The Commission has also considered additional criteria relevant for assessing  
airport  substitutability in relation to the market for airport infrastructure services, 
while acknowledging that the airlines ’ choice of airports ultimately depends on 
passengers ’ demand. In addition to the catchment area of a particular airport,  the 
Commission has notably analysed the capacity constraints for slots and facilities, 
passenger volumes or the positioning of the airport (e.g. a niche airport serving 
high yield time -sensitive passengers or an airport serving mainly leisure, less time -
sensitive passengers).126 
                                                 
122  See e.g. Cases M.7270  Český Aeroholding/Travel Service/České aerolinie , paragraph 50; M.7008 – 
Aena International/Axa PE/LLAGL , paragraph 12.  
123  See e.g. Case M.7398  MIRAEL/ Ferrovial/NDH1 , paragraph 19; M.5648 - OTPP/Macquarie/Bristol 
Airport, paragraph 10.  
124  See e.g. Cases M.7270  Český Aeroholding/Travel Service/České aerolinie , paragraph 50.  
125  The Transaction would not give rise to any horizontal overlap.  
126  See e.g. Cases M.5652 – GIP/Gatwick Airport , paragraph 14; M.4164 – Ferrovial/Quebec/GIC/BAA, 
paragraphs 15 -17; M.3823 – MAG/Ferrovial Aeropuertos/Exeter Airport , paragraphs 16 -19.  
 
33 (151)  The Commission has taken account of all the above -mentioned criteria when 
assessing the geographic scope of the airport infrastructure services markets 
relevant for the assessment of the effects of transfer of slots.127  
(152)  The question o f the exact geographic market definition is relevant (i) for the 
assessment of the effects of the Transaction on passenger air transport services 
under the airport -by-airport approach and (ii) for the assessment of the potential 
vertical links between Stob art Aviation and Flybe.  
Relevant geographic market for the assessment of the effects of transport of slots on the 
access to airport infrastructure services  
(153)  For the purpose of the assessment of the effects of the Transaction on the market 
for passenger air  transport under the airport -by-airport approach, w ith respect to the 
overlap airports where the question of a broader geographic scope encompassing 
several airports might be relevant, the Commission will focus its assessment of 
airport substitutability on  markets where the Parties would have a slot holding 
above 20% on average  at a specific airport or at a combination of airports within 
the same catchment area . The Commission  consider s that a combined average slot 
holding below 20% is unlikely to give the Parties the ability to foreclose access to 
the market for airport infrastructure services. As explained in section 5.1.2  below, 
the only airport where Parties would have a combined slot holding above 20% and 
where the question of airport substitutability w ould be relevant is Paris Charles de 
Gaulle airport.  Therefore  the Commission will assess whether Paris Charles de 
Gaulle is substitutable with other airports within the same catchment area.  
(154)  According to the Parties, Paris Charles de Gaulle  (CDG) , Paris Orly (ORY)  and 
Beauvais (BVA) airports belong to the same geographic market with respect to 
airport infrastructure services.128 
(155)  The city of Paris is served by three airports, namely CDG, ORY and BVA.  
(156)  Delta, AFKL and Flybe hold slots at CDG. AFKL also holds slot at ORY. The 
Transaction therefore gives rise to an overlap between AFKL/Virgin Atlantic and 
Flybe at CDG and on a broader geographic scope comprising at least (i) CDG and 
(ii) ORY and/or BVA. However , BVA is neither a Level 2 or Level 3 airport and is 
therefore not slot con strained. Its positioning differs from CDG and ORY. BVA 
focuses on short -haul and is mainly used by low -cost carriers.129 The Commission 
will therefore focus its assessment on wh ether CDG and ORY belongs to the same 
geographic market  with respect to airport infrastructure services . In any event, 
given that the Parties do not hold slots at BVA, taking account of BVA would only 
dilute the Parties’ combined slot holding and the incre ment brought about by the 
Transaction.  
                                                 
127  See Cases M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 142 et seq .; 
M.8869 – Ryanair/LaudaMotion , paragraphs 238 et seq ., M.8672 – easyJet/Certain Air Berlin assets , 
paragraphs 73 et seq. ; M.8633 – Lufthansa/Certain Air Berlin assets , paragraphs 117 et seq . 
128  Form CO, paragraph 722.  
129  Form CO, paragraph 739.  
 
34 (157)  The question of the catchment area of Paris  airports is addressed in section 4.1.4. 2 
above. From the point of view of passengers, CDG and ORY might be considered 
as substitutable with respect to certain routes .130 
(158)  As regards capacity constraints, both CDG and ORY  are coordinated (Level 3) 
airports  in both IATA Seasons . 
(159)  In 2018, 7 2.2 million passengers used Paris Charles de Gaulle  airport131, while 
33.1 million passengers used Paris Orly airport .132 
(160)  As regards positioning, CDG is the largest international airport in France in terms 
of passenger traffic. CDG is served by more than 60 passenger and cargo airlines, 
which mainly focus on international long -haul flights.133 In Summer 2018, direct 
flights were offered to 318 destinat ions134 and 90% of flights were to international 
destinations.135 Based on data from ADP, approximately 13% of the traffic at CDG 
was operated by low -cost carriers.136 
(161)  ORY is the second largest airport in France in terms of passenger traffic. ORY is 
served by 35  airlines which operate primarily to short -haul destinations in mainland 
France, Europe, North Africa and the French Overseas Territories.137 In Summer 
2018, direct flights were offered to 139 destinations138 and 59% of flights were to 
international destinatio ns.139 In 2017, approximately 38% of the traffic was 
operated by low -cost airlines.140 
(162)  Considering that Paris Charles de Gaulle and Paris Orly have different positioning 
and strategy, the Commission concludes that, for the purpose of the assessment of 
the effe cts of the Transaction on passenger air transport services under the airport -
                                                 
130  In Case M.5830 – Olympic/Aegean Airlines , paragraph 1676, the Commission concluded that CDG 
and ORY are substitutable for TS and NTS passengers on the Athens -Paris route. With respect to the 
overlap routes between AFKL and Flybe, it cannot be concluded that CDG an d ORY are substitutable.  
131  Form CO, paragraph 725.  
132  Form CO, paragraph 725.  
133  Form CO, paragraph 726.  
134  Form CO, paragraph 724.  
135  Form CO, paragraph 727.  
136  Form CO, paragraph 729.  
137  Form CO, paragraphs 732 -733.  
138  Form CO, paragraph 724.  
139  Form CO, paragraph 734.  
140  Form CO, paragraph 737.  
 
35 by-airport approach , the geographic scope of the market for the provision of airport 
infrastructure services to airlines is limited to Paris Charles de Gaulle  airport.141 
Relevant geographic market for the assessment of the vertical effects created by the 
Transaction  
(163)  Considering that Stobart Aviation is active in the market for the provision of airport 
infrastructure services at several airports in the United Kingdom, the Commission  
will assess the geographic scope of airport infrastructure services for London 
Southend (SEN) airport and DTVA airport.142  
(164)  The question of the catchment area of London airports is addressed in section 
4.1.4.2 above. From the point of view of passengers, th e relevant markets consists 
of flights to/from London Heathrow only, or to/from Heathrow, Gatwick and City 
airports ( “London(three) ”), or Heathrow, Gatwick, City, Luton, Stansted and 
Southend ( “London(six) ”). As regards capacity constraints, LHR, LGW, LCY,  
LTN and STN are coordinated (Level 3) airports while SEN is neither schedules 
facilitated nor coordinated. The question whether airport infrastructure services at 
SEN constitute a separate market or whether airport infrastructure services should 
be consid ered for London(six) airports can be left open, because the Transaction 
would not raise serious doubts as to its compatibility with the internal market under 
any plausible geographic market definition.  
(165)  With respect to the geographic scope of the provision  of airport infrastructure 
services in the Tees Valley (UK), the Parties submit that the geographic scope 
comprises DTVA, Leeds airport ( “LBA ”) and Newcastle airport ( “NCL ”).143 The 
three airports are within 100 km of Middlesbrough city, the closest city cen tre to 
DTVA. The results of the market investigation are inconclusive as to whether 
DTVA, LBA and NCL belongs to the same market.144 The Commission considers 
that the question whether the market for the provision of airport infrastructure 
services consists i n DTVA only or encompasses DTVA, LBA and NCL can be left 
open because the Transaction would not raise serious doubts as to its compatibility 
with the internal market, under any plausible geographic market definition.  
4.2.2.2.3  Conclusion  
(166)  For the purpose of the asses sment of the effects of the Transaction on passenger air 
transport services under the airport -by-airport approach , the Commission will 
assess the effects of the Transaction on the market for the provision of airport 
infrastructure services to airlines , wit hout further delineation . Similarly, for the 
                                                 
141  For the sake of completeness, the Parties have provided their slot holding for a geographic market 
comprising ORY and CDG. The competitive assessment remains unchanged under any plausible 
geographic m arket definition.  
142  The Parties do not suggest any substitutable airport to Carlisle airport. The Transaction would not raise 
serious doubts as to its compatibility with the internal market, even on a market defined as 
encompassing Carlisle airport only.  
143  Form CO, paragraph 1464.  
144  Replies to eQ1 – Questionnaire to Airlines, question 60.  
 
36 purpose of assessing the vertical links created between Stobart Aviation and Flybe, 
the Commission will assess the effects of the Transaction on the market for the 
provision of airport infrastructure services to  airlines, without further delineation.  
(167)  For the purpose of the assessment of the effects of the Transaction on passenger air 
transport services under the airport -by-airport approach , the Commission considers 
that the geographic scope of the market for air port infrastructures services is 
limited to the individual airport  with respect to airport infrastructure services at 
Paris Charles de Gaulle airport . Considering that the Transaction would not raise 
serious doubts as to its compatibility with the internal market with respect to 
passenger air transport under the airport -by-airport approach, the question of the 
exact geographic market for airport infrastructure at the overlap airports can be left 
open. For the purpose of assessing the vertical links created b etween Stobart 
Aviation and Flybe, the Commission will assess the vertical effects under every 
plausible geographic market definition given that the exact geographic market 
definition can be left open with respect to airport infrastructure services at SEN and 
DTVA.  
4.3 Market for the provision of access to flights of another carrier for connecting 
passengers in the context of interlining arrangements  
4.3.1 Relevance of feeder traffic analysis  
(168)  Passengers travelling on indirect flights, in particular for long -haul fli ghts, connect 
from one flight to the other flight at a certain airport. These passengers do not 
necessarily travel each “leg” of their journey with the same airline. Traffic made up 
by passengers connecting at either one or both ends of the route, in parti cular for 
long haul flights , is referred to as “feeder traffic ”.145 
4.3.1.1  Parties ’ views  
(169)  The Notifying Parties consider that, w hile the vast majority of Flybe ’s activities 
focus on point -to-point flying, Flybe h as entered into a number of interlining and 
codeshare  agreements with third party carriers to enhance  connectivity for its 
customers.146 According to the Notifying Parties, a s a result of the Transaction, the 
Parties will not have the  ability or incentive to foreclose third party long -haul 
carriers ’ access to feeder traffic on any  specific route. On the contrary, the rationale 
for the Transaction is to allow enhanced  connectivity for customers to t ravel to 
destinations globally.147 
(170)  According to the Notifying Parties, the acquisition will enable Flybe to benefit 
from committed strategic investment partners in terms of Cyrus, Stobart Aviation 
and Virgin Atlantic (through Connect Airways) and through linking an enhanced 
                                                 
145  See e.g. Case M.7541 – IAG/Aer Lingus , paragraph 106.  
146  Form CO, paragraph 883.  
147 Form CO, paragraph 56.  
 
37 Flybe regional network with Virgin Atlantic’s long -haul operations, increasing 
feeder traffic, par ticularly at LHR and MAN.148 
4.3.1.2  Commission ’s assessment  
(171)  In its prior decision practice, the Commission has analysed if one of the merging 
airlines has provided competitors with feeder traffic . Such feeder traffic may 
constitute an essential input for a competit or, the Commission therefore analysed 
an input foreclosure theory of harm, assessing ability and incentive of the merging 
parties to engage in input foreclose post -Transaction, as well as the overall likely 
impact on effective competition of such potential  foreclosure.149   
(172)  Flybe has interlining and codeshare agreements with several third party airlines, 
and provides feeder traffic  to those third party airlines’ long -haul flights  (including 
where these third party airlines compete with Virgin Atlanta, Delta or AFKL for 
the long -haul flights) .150   
(173)  For the purpose of the competitive assessment of the Transaction, the Commission 
will therefore apply the analytical framework designed to address the risk of input 
foreclosure in relation to feed er traffic resulting from the change of control over 
Flybe. This theory of harm is assessed in Section 5.1.3  below.  
4.3.2 Market definition  
4.3.2.1  Parties ’ views   
(174)  The Parties have considered the impact of the Transaction on the market for the 
provision of access to flights of another carrier for connecting passen gers in the 
context of interlining arrangements, which is defined on an O&D and city -pair 
basis for each input flight151, in line with the approach taken by the Commission in 
previous decisions.152 
4.3.2.2  Commission’s  assessment  
(175)  “Connecting ” or “transfer passengers ” are passengers who fly indirectly on a given 
city-pair (e.g. Dublin -Chicago via London Heathrow). These passengers do not 
necessarily travel each “leg” or “sector ” of their journey on the same carrier (e.g. 
the carrier who sold them the ticket). In particu lar for long -haul flights, traffic 
made up by passengers connecting at either or both ends of the route is commonly 
referred to as “feeder traffic ”. 
                                                 
148 Form CO, paragraph 184.  
149  See e.g. Case M.7541 – IAG/Aer Lingus , paragraph 442 et seq .  
150  Form CO, paragraph 56.  
151  Form CO, paragraph 881.  
152  See Cases M.6447 – IAG/bmi of 30 March 2012 and M.7541 – IAG/Aer  of 14 July 2015.  
 
38 (176)  There is a variety of agreements whereby single tickets may be sold for indirect 
route s including two legs operated respectively by the two carriers which 
concluded the agreement. In the framework of such agreements, the carrier 
granting access to its flights to passengers connecting onto another carrier ’s flight 
and travelling with a singl e ticket issued by this second carrier provides an “input ” 
to the latter and is remunerated for it. This “input ” is used to supply the 
downstream service, i.e. a ticket for an indirect route  on a given city -pair. Two 
carriers that interline are thus engage d in a vertical relationship when one of them 
sells tickets for indirect route s including one leg operated by the other carrier.153 
(177)  The main different types of “feeder traffic ” or “interlining ar rangements ” are the 
following:154  
a) Interline agreements, which ar e commercial agreements between airlines to 
handle passengers travelling on multiple airlines on the same itinerary. These 
agreements allow one carrier to issue the main itinerary ticket while each carrier 
is marketing its own sector.  
b) Codeshare agreements,  which allow one carrier to sell tickets on another carrier ’s 
flight under its own name and flight code, thereby broadening their service 
offering and destinations.  
c) Special Prorate Agreements ( “SPAs ”), which support interlining and codesharing, 
and which specifically define the distribution of the revenues and the settlement 
of ticket costs between carriers.  
d) Alliance memberships, which typically entail codesharing (although the actual 
codeshare agreements are still concluded between two airlines) but which  also 
imply a number of mutual obligations which go beyond those required by 
codesharing  (such as, for example, mutual Frequent Flyer Programme 
participation155). 
(178)  These agreements are in principle mutually beneficial as they give each party the 
opportunity t o increase its load factors. In principle, they also benefit passengers as 
they increase connection opportunities, allow passengers to be compensated in case 
of missed connections and spare them from taking back luggage at the connection 
airport.  
(179)  There ar e cases where both carriers can sell tickets for indirect route s including one 
leg operated by the other party to the agreement. In such a situation, the vertical 
relationship is symmetrical: both carriers are active upstream and downstream in 
respect of o ne another. There are also cases where the ticket for the indirect route  is 
sold by a third party (e.g. a travel agent).  
                                                 
153  See Case M.6447 – IAG/bmi , paragraph 78; Case M.7541 IAG/Aer Lingus , paragraph 107.  
154  Form CO, paragraph 872  
155 Final report of January 2007 on the competition impact of airline code -share agreements, prepared by 
a.o. European Commission Directorate General for Competition Unit D -2 ‘Transport’.  
 
39 (180)  The carrier or distributor operating the downstream service (in casu  long-haul 
routes)  provides  passenger  air transport services  between two cities. The 
downstream service is the market for the provision of air transport services between 
these two cities. As assessed above, this market has to be defined on an O&D basis, 
i.e. by reference to the two cities (or as the case may be, to  the two airports) at both 
ends of the flight itinerary.  
(181)  The carrier operating the upstream service (carrying the feeder traffic) provides to 
the downstream carrier access to its flights to one end of the city pair (i.e. the 
connecting airport ). For exampl e, for route s between Manchester and Orlando  
operated by the downstream carrier , the upstream market concerned  for the 
provision of access to flights for connecting passengers would comprise all routes  
to and  providing feeder traffic at Manchester . Such an  upstream market has to be 
defined as comprising all routes to the connecting airport where  the flight s carrying 
the feeder traffic  are operated. Indeed, a carrier wanting to supply flights e.g. 
between Manchester and Orlando  may rely on and  need as an inp ut access to flights 
feeding traffic to Manchester . Flights to other cities cannot, in principle,  constitute 
a valid substitute.  
4.3.2.3  Conclusion  
(182)  As a conclusion, the relevant markets for the provision of access to flights from a 
number of airports in Europe for  connecting passengers in the context of interlining 
arrangements have to be defined on an O&D basis.  
4.4  Air transport of cargo  
4.4.1.1  Relevant product market  
(183)  In prior decisions, the Commission considered a market for air transport of cargo 
including all kinds of t ransported goods provided by all types of air cargo 
carriers,156 without any further subdivision to be made according to the nature of 
the goods transported (for example, dangerous or perishable goods) or the type of 
air cargo carrier.157  
(184)  In fact, the Commission has concluded that four types of air cargo carriers, namely 
(i) cargo airlines with dedicated freighter planes; (ii) airlines with only belly space 
cargo capacity on passenger flights; (iii) combination airlines (i.e. airlines with 
both dedicate d freighter airplanes and belly space cargo capacity); and (iv) 
integrators, compete with each other for business with the same kinds of 
customers.158 
                                                 
156  See Cases M.8361 – Qatar A irways/Alisarda/Meridiana , paragraph 37; M. 6828 – Delta Airlines/ 
Virgin Group / Virgin Atlantic Limited , paragraph 76; M.6447 – IAG/bmi , paragraph 92; M.5747 – 
Iberia/British Airways , paragraph 40.  
157  See Cases M. 6828 – Delta Airlines/ Virgin Group / Vi rgin Atlantic Limited , paragraphs 73 -74; 
M.6447 – IAG/bmi , paragraphs 91 -92; M.5747 – Iberia/British Airways , paragraph 40.  
158  See Cases M. 6828 – Delta Airlines/ Virgin Group / Virgin Atlantic Limited , paragraph 75; M.6447 – 
IAG/bmi , paragraph 89; M.5747 – Iberia/British Airways , paragraph 38.  
 
40 (185)  Based on the Commission’s prior decisions, the O&D approach to market 
definition is not appropriate for air  cargo transport services because cargo is (i) in 
principle less time -sensitive than passengers, and (ii) usually transported “behind ” 
and “beyond ” the points of origin and destination by trans -modal transport methods 
and thus can be routed via a higher nu mber of stops than passengers.159 
Consequently, the Commission considers that a wider market for air transport of 
cargo exists as, unlike passengers, cargo can be transported with a higher number 
of stopovers and therefore any one -stop route is a substitute for any non -stop 
route.160 In addition, as established in previous Commission decisions, air cargo 
transport markets are inherently unidirectional due to differences in demand at each 
end of the route and must hence be assessed on a unidirectional basis.161 
(186)  The Parties agree with the Commission’s decision -making practice.162   
(187)  In line with its prior decisional practice, the Commission will assess the effects of 
the Transaction on a broader market for air transport of cargo encompassing all 
types of air cargo car riers and including all kinds of transported goods on a 
unidirectional basis  in Section 5.5 below . 
4.4.1.2  Relevant geographic market  
(188)  In prior decisions, the  Commission defined the market in intra -European routes of 
air cargo transport as European -wide.163 As regards intercontinental routes, the 
Commission established that catchment areas at each end of the route broadly 
correspond to continents where local infr astructure is adequate to allow for onward 
connections (for example, by road, train, or inland waterways, etc.), such as Europe 
and North America. As regards continents where local infrastructure is less 
developed, the relevant catchment area has been cons idered the country of 
destination.164  
                                                 
159  See Cases M.8361 – Qatar Airways/Alisarda/Meridiana , paragraph 38; M.6828 – Delta Airlines/ 
Virgin Group / Virgin Atlantic Limited , paragraph 72; M.6447 – IAG/bmi , paragraph 87; M.5747 – 
Iberia/British Airways,  paragraph 36.  
160  See Cases M.6828 – Delta Airlines/ Virgin Group/ Virgin Atlantic Limited , paragraph 73; M.6447 – 
IAG/bmi , paragraph 88; M.5747 – Iberia/British Airways , paragraph 37.  
161  See Cases M.8964 – Delta / Air France -KLM / Virgin Group / Virgin Atla ntic, paragraph 159; M.8361 
– Qatar Airways/Alisarda/Meridiana , paragraph 39; M.6828 – Delta Airlines/ Virgin Group / Virgin 
Atlantic Limited , paragraph 77; M.6447 – IAG/bmi , paragraph 90; M.5747 – Iberia/British Airways , 
paragraph 39.  
162  Form CO, paragraph 1086.  
163  See Cases M.8361 – Qatar Airways/Alisarda/Meridiana , paragraph 39; M.6447 – IAG/bmi , paragraph 
93; M.5747 – Iberia/British Airways , paragraph 41.  
164  See Cases M.8964 – Delta / Air France -KLM / Virgin Group / Virgin Atlantic, paragraph 16 2; M.8361 
– Qatar Airways/Alisarda/Meridiana , paragraph 39; M.6828 – Delta Airlines/ Virgin Group / Virgin 
Atlantic Limited , paragraph 79; M.6447 – IAG/bmi , paragraph 94; M.5747 – Iberia/British Airways , 
paragraph 42.  
 
41 (189)  The Parties consider that the Commission’s previous finding of unidirectional 
markets defined on a continent -to-continent basis (or country basis, where 
connecting transport infrastructure is less developed) is still appropriate.165 
(190)  Therefore, in line with its prior decisional practice, the Commission will assess the 
effects of the Transaction on a continent -to-continent basis  (or continent -to country 
basis as the case may be) , in particular on a n EEA -wide (intra -Europea n) basis . 
4.4.1.3  Conclusion  
(191)  Therefore, in line with its prior decisional practice, the Commission will assess the 
effects of the Transaction on a n EEA -wide  market for air transport of cargo 
encompassing all types of air cargo carriers and including all kinds of t ransported 
goods on a unidirectional basis.  
4.5 Maintenance, repair and overhaul ( “MRO”) services  
4.5.1.1  Relevant product market  
(192)  In prior decisions, the Commission distinguished four separate segments within the 
MRO market based on the part of the aircraft to be serv iced and the level of service 
required, namely (i) line maintenance (minor checks carried out on aircraft and 
performed at the different airports), (ii) heavy maintenance (comprehensive 
inspection and overhaul of the aircraft, for which the aircraft is tak en out of 
service), (iii) engine maintenance, and (iv) components maintenance (inspection, 
repair and overhaul of specific aircraft components).166 The Commission also 
considered but ultimately left the question open, whether a distinction between 
commercial  and business aviation is appropriate.167 It moreover noted that line 
maintenance and heavy maintenance can be further subdivided according to nature 
and frequency of the checks involved (A, B, C and D -checks).168 
(193)  The Parties submit that the precise scope of t he product market definition for MRO 
can be left open as no serious doubts would arise under any plausible market 
                                                 
165 Form CO, paragraph 1089.  
166  See Case s M.8425 – Safran/Zodiac Aerospace , paragraph 289; M.6447 – IAG/bmi , paragraph 105; 
M.6554 – EADS/STA/Elbe Flugzeugwerke JV , paragraph 25; M.6410 – UTC/Goodrich , paragraph 174; 
M.5747 – Iberia/British Airways , paragraph 48; M.3374 – SR Technics/FLS Aerospa ce, paragraph 9; 
M.3280 – Air France/KLM , paragraph 39.  
167  See Cases M.8425 – Safran/Zodiac Aerospace , paragraph 289.  
168  See Cases M.8425 – Safran/Zodiac Aerospace , paragraph 289; M.6554 – EADS/STA/Elbe 
Flugzeugwerke JV , paragraph 25; M.6410 – UTC/Goodric h, paragraph 174; M.3280 – Air 
France/KLM , paragraph 39. An A -check is performed approximately every 800 flight hours and 
requires around 200 -300 man -hours to complete. B -checks are performed approximately every 4 -6 
months and are usually performed within 3 days at an airport hangar. C -checks are performed 
approximately every 18 to 24 months or after a specific amount of actual Flight Hours as defined by 
the manufacturer. D -checks/structural checks are the most comprehensive and demanding checks, 
since the entire aircraft structure is taken apart for inspection and overhaul. Intermediate structural 
checks occur after 5 -6 years and heavy structural checks occur after 10 -12 years. Such checks will 
usually demand around 15,000 to 20,000 man -hours and around 1 m onth to complete at suitably 
equipped maintenance bases.  
 
42 definition.169 However, in line with the Commission’s decisional practice, they 
provided data for each of the following MRO segment s (i) line ma intenance; (ii) 
heavy maintenance; (ii) engine maintenance; and (iv) components maintenance . 
(194)  In light of the above, the Commission concludes that the precise scope of the 
product market definition for MRO services can be left open since the Transaction 
does not raise serious doubts as to its compatibility with the internal market under 
any plausible product market definition , as assessed in Section 5.6 below.  
4.5.1.2  Relevant geographic market  
(195)  In prior decisions, the Commission considered that the geographic scope of the 
market for heavy maintenance services might be at least EEA -wide, whereas line 
maintenance services could be local in scope and even limited to the airport where 
services are provided.170 Indeed, line maintenance services are usually carried out 
at the airport of origin or destination, or at the aircraft’s operational base.171 As 
regards  to engine maintenance services and components maintenance services, the 
Commission has considered these services to be worldwide in scope.172 
(196)  The Parties submit that the precise scope of the geographic market definition for 
MRO can be left open as no seriou s doubts would arise under any plausible market 
definition.173 
(197)  For the assessment of the Transaction, the Commission concludes that the precise 
geographic market definition for MRO services can be left open, since the 
Transaction does not raise serious doubt s as to its compatibility with the internal 
market under any plausible geographic market definition , as assessed in Section 5.6 
below.  
4.6  Dry-leasing, wet-leasing and franchise services  to other airlines   
(198)  Dry-leasing involves the leasing of an aircraft to an airline, without crew, 
maintenance services and insurance. Dry -leased aircraft are usually used by airlines 
to increase capacity on a route without the burden of buying an aircraft. In contrast 
to dry-leasing services, wet -leasing to airlines involves the leasing of an aircraft to 
                                                 
169 See Reply to RFI 6 of 1 July 2019. Form CO, paragraphs 1125, 1157 -58, 1202, 1254.  The Parties claim 
that, for heavy maintenance, in most cases and for most types of aircraft, “C” and “D” checks for m 
part of the same market or are very close alternatives and should be analysed jointly  (see Form CO, 
paragraph 1158) . 
170  See Cases M.7545 – IAG/Aer Lingus , paragraph 121; M.6554 – EADS/STA/Elbe Flugzeugwerke JV , 
paragraph 26; M.6447 – IAG/bmi , paragraph 108; M.3374 – SR Technics/FLS Aerospace , paragraph 
12. 
171  See Cases M.7545 – IAG/Aer Lingus , paragraph 121; M.6554 – EADS/STA/Elbe Flugzeugwerke JV , 
paragraph 26; M.3374 – SR Technics/FLS Aerospace , paragraph 12; M.3280 – Air France/KLM , 
paragr aph 40.  
172  See Cases M.7545 – IAG/Aer Lingus , paragraph 121;  M.6554 – EADS/STA/Elbe Flugzeugwerke JV , 
paragraph 26; M.6447 – IAG/bmi , paragraph 108.  
173  See Reply to RFI 6 of 1 July 2019; Form CO, paragraphs 1127, 1162, 1203, 1256.  
 
43 an airline with crew, maintenance and insurance (‘ACMI’). Wet-leasing also allows 
an airline to increase its capacity or operate new routes without having to buy an 
aircraft or  provide itself for crew, insurance and maintenance. Finally, a franchise 
agreement also allows an airline to increase its capacity or to operate new routes. 
Under a franchise agreement, the airline wishing to expand is the franchisor putting 
its brand and  livery at the disposal of the franchisee for use under the franchise 
agreement. The franchisee operates with its own aircraft, crew, maintenance , 
insurance and slots, using the brand and livery of the franchisor. The franchisee 
bears the commercial risk, including setting fares , but the franchisor markets the 
route as part of its network and sells the tickets . In return for the use of the brand 
and for the services provided, the franchisee pays a fee to the franchisor . 
(199)  Propius provides intra -group dry -leasing services of regional aircraft to Stobart Air. 
Stobart Air is active in the market for the provision of wet -leasing services to 
airlines, while Flybe marginally provides such services to […]. With regard to 
franchise services, Stobart Air is active as f ranchisee while Flybe is active as 
franchisor.  
(200)  The Commission has not yet defined the product and geographic markets for the 
provision of dry -leasing, wet -leasing and franchise services.  The Commission is 
however familiar with wet -leasing agreements.174 Similarly, the Commission has 
not yet defined the market for the provision of franchise services but has examined 
franchise agreements.175 
(201)  Airlines can source  aircraft and aircraft operations in different ways. For dry 
leasing agreements, wet leasing agreem ents and franchising agreements  there 
would be  different degree s of commercial risk, but also of skill and expertise 
required on the side of the airline operator  for each of these agreements .  
(202)  The Parties explained the main differences in the allocation of res ponsibilities and 
commercial risk between dry lease agreements, wet lease agreements and franchise 
agreements , which are summarised in the chart below . 
                                                 
174  See e.g. Case M.8633 – Lufthansa/Certain Air Berlin Assets . 
175  See case M.6663 – Ryanair/Aer Lingus II I. 
 
44  
 Source: Form CO, paragraph 1291  
(203)  The Parties explained that in a dry lease, only the aircraft would be leased to an 
airline (which would be operating the aircraft and selling the tickets). Dry leasing 
services would normally be provided by leasing companies and aircraft 
manufactures rathe r than airlines. Dry leasing would not require the lessor to have 
any authorisation to fly, in addition,  no Air Operator Certificate (“AOC ”) would be 
required.176 
(204)  For wet-lease and franchise agreements , the Parties explained which party of the 
agreement  is responsible for the different aspects of the business operations.  
 
Source: Form CO, paragraph 1292  
                                                 
176  Form CO, paragraphs 1293 and 1295 et seq . 

 
45 (205)  The main features distinguishing franchise and wet leasing are the commercial risk 
and the duration of the agreement.  
(206)  The Parties explained that under a fr anchise agreement, the commercial risk would 
be passed on to the franchisee (the operating airline) who generates revenues 
through the sale of seats by the franchisor (and the franchisee pays the franchisor a 
franchise fee). Franchising would also be a met hod to expand brand presence, 
without further investments and financial risk.177 
(207)  In a wet lease agreement , the lessee would retain the commercial risk of selling 
tickets. Wet-leasing would allow the airline to continue its operations and thereby 
not losing its own slots, without the need to acquire additional aircraft and to hire 
crew.178 
(208)  In terms of duration, franchise agreements would tend to have a duration between 5 
and 10 years, whereas wet lease agreements would be normally shorter than 2 
years.179 
(209)  The Parties submitted that from the supply -side, for a supplier of wet -leasing 
services (lessor) to offer franchise services  (franchisee) , it would have to assume 
the commercial risk for the flight, including setting prices and would have to create 
the internal s tructure for revenue management and pricing.180 The Parties consider 
that a supplier of franchise services (franchisee) would in contrast not require 
significant investments to offer wet -leasing services, because the franchisee would 
have access to aircraft,  crew and maintenance, which are needed to provide wet -
leasing services. In addition, wet -lease agreements would not require the lessor to 
bear the commercial risk and would usually be of a shorter duration than franchise 
agreements, so a supplier of franc hise services could enter into a wet -lease 
agreement without requiring further investments.181 
(210)  The market investigation has not produced any evidence indicating that dry -
leasing, wet -leasing and franchising services are considered substitutable. 
Respondents have not submitted any comment suggesting that there is any need to 
define a combined market for dry -leasing, wet -leasing and franchising services.182 
With regard to wet -leasing and franchising services, respondents answering that 
they procure wet -leasing se rvices explained with a majority that they do not 
procure franchising services.183 
                                                 
177  Form CO, paragraph 1310 et seq . 
178  Form CO, paragraph1310 et seq . 
179  Form CO, paragraph 1293 and 1295 et seq. 
180  Form CO, paragraph 1310 et seq.  
181  Form CO, paragraph 1312 et seq . 
182  Replies to eQ1 – Questionnaire to Airlines, question 66; eQ2 – Questionnaire to Corporate Customers, 
question 17 and eQ3 – Questionnaire to Travel Agents, question 18.  
183  Replies to eQ1 – Questionnaire to Airlines, questions 40 and following and question 50.  
 
46 (211)  The Commission considers that, from the demand side of the airlines, dry -leasing 
appears not be substitutable with wet -leasing or franchising services , because dry -
leasing onl y provides the airline seeking to expand with an aircraft whereas wet -
leasing and franchising services provide also crew and other services.  In addition, 
dry-leasing does not seem to be substitutable with wet -leasing or franchising 
services from the supply  side because the suppliers of dry leasing services would 
need significant additional resources (e.g. crew) and fulfil regulatory requirement 
(e.g. an AOC) to offer wet -leasing or franchising services.  
(212)  Concerning wet -leasing and franchising services, the C ommission considers that  
wet-leasing and franchising have different business models and offer different 
solutions for an airline seeking to expand.  
(213)  For those reasons, the Commission considers that dry-leasing services, wet-leasing 
services and franchise services constitute distinct markets.  The plausible 
segmentations of those three markets are assessed in the following.  
4.6.1.1  Dry leasing  
(214)  The market investigation aimed at determining whether the product market for the 
supply of dry -leasing services to airlines  could be segmented on the basis of 
aircraft size and type.  
(215)  The majority of airlines responding to the market investigation and  having 
expressed a view did not consider that large commercial aircraft (i.e. aircraft with 
more than 100 seats and a range of greater than 2000 nautical miles) and regional 
aircraft (aircraft with around 30 to 100 seats and a range of less than 2000 nautical 
miles) could be regarded as substitutable for reason of their technical 
characteristics, price and intended end -use.184 One a irline explained that “Two 
aircraft types with very different capacities are largely not substitutable. An airline 
would choose the aircraft type to be deployed on a specific route portfolio 
according to the actual or expected demand on a route to be able to operate the 
aircraft on a profitable basis. With an aircraft of a different capacity, not matching 
the demand, it will in most cases be very difficult to achieve this. ”185 
(216)  When airlines were asked if, as a customer of aircraft dry -leasing services, they h ad 
switched from large commercial aircraft to regional aircraft in the past, or vice 
versa, the majority of airlines explained that they had not switched. One airline 
explained  that they had changed in some instances aircraft sizes according to the 
demand from bookings.186 
(217)  With regard to the dry -leasing of large commercial aircraft, the majority of airlines 
responding to the market investigation explained that they do not consider wide -
                                                 
184  See replies to eQ1 – Questionnaire to airlines, question 32.  
185  See replies to eQ1 – Questionnaire to airlines, question 32.  
186  See replies to eQ1 – Questionnaire t o airlines, question 33.  
 
47 body aircraft with 200 -400+ seats and narrow -body aircraft with 100 -200 se ats as 
substitutable  for them as customers of dry -leasing services .187 
(218)  Concerning regional aircraft, the majority of airlines responding to the market 
investigation explained that they do not consider small regional aircraft with 30 -50 
seats and large region al aircraft with 70 -90+ seats to be substitutable for them as 
customers of dry -leasing services.188 
(219)  The Commission therefore considers that the market for the provision of dry 
leasing services should be segmented according to the aircraft size  (seat capacity ). 
The precise market definition can however be left open since the Transaction does 
not raise serious doubts under any plausible market definition.  
(220)  Concerning the geographic market definition, a majority of the airlines responding 
to the market definition explained that they purchase dry -leasing services 
worldwide.189 Some  of the airlines responding to the market investigation 
explained that they also supply aircraft dry -leasing services and would do so 
worldwide.190 
(221)  The Commission therefore consider s that the geographic market for the provision 
of dry -leasing services is worldwide.  
4.6.1.2  Wet-leasing  
(222)  Aircraft can be used for passenger transport or for cargo transport.  The Parties 
submitted that the aircraft and crew for cargo and for passenger transport are  
different: for cargo air transport, aircraft would not be equipped with passenger 
seats and only pilots would be required, no flight attendants. Cargo aircraft would 
typically be aircraft that had been retired from passenger services and they would 
be old er and cheaper to lease than passenger aircraft.191 In addition, the Parties 
submitted that the providers of passenger and cargo aircraft would be generally 
different. The providers of wet -leasing services for air passenger transport would 
not generally prov ide wet -leasing services for air cargo transport. Cargo aircraft 
would normally be operated by a small number of specialist suppliers. From a 
supply -side perspective, for a supplier of wet -leasing services for air cargo 
transport to switch to wet -leasing s ervices for air passenger transport, it would need 
different aircraft and crew.  
(223)  The Commission therefore considers that wet -leasing services for air cargo and 
passenger air transport services appear to constitute distinct markets. However, 
since Stobart A ir and Flybe only provide wet -leasing services for passenger air 
                                                 
187  Reply of an air carrier to eQ1 – Questionnaire to airlines, question 34.  
188  See replies to eQ1 – Questionnaire to airlines, question 35.  
189  See replies to eQ1 – Questionnaire to airlines, question 36.  
190  See replies to eQ1 – Questionnaire to airlines, question 37.  
191  Form CO, paragraph 1318.  
 
48 transport, the Commission will only assess this market segment further in this 
decision , which is in any event the narrowest plausible market . 
(224)  The market investigation aimed at determining whether the product market for the 
supply of wet -leasing services to airlines could be segmented on the basis of 
aircraft size and type.  
(225)  The majority of airlines responding to the market investigation and havi ng 
expressed a view did not consider that large commercial aircraft (i.e. aircraft with 
more than 100 seats and a range of greater than 2000 nautical miles) and regional 
aircraft (aircraft with around 30 to 100 seats and a range of less than 2000 nautical 
miles) could be regarded as substitutable for reason of their technical 
characteristics, price and intended end -use.192  
(226)  When airlines were asked if, as a customer of aircraft wet -leasing services, they 
had switched from large commercial aircraft to regional  aircraft in the past, or vice 
versa, the majority of airlines explained that they had not switched.193  
(227)  With regard to the wet -leasing of large commercial aircraft, the majority of airlines 
responding to the market investigation explained that they do not c onsider wide -
body aircraft with 200 -400+ seats and narrow -body aircraft with 100 -200 seats as 
substitutable for them as customers of wet -leasing services.194 
(228)  Concerning regional aircraft, the majority of airlines responding to the market 
investigation explai ned that they do not consider small regional aircraft with 30 -50 
seats and large regional aircraft with 70 -90+ seats to be substitutable for them as 
customers of wet -leasing services.195 
(229)  The Commission therefore considers that the market for the provision of  wet-
leasing services could  be segmented according to aircraft size. The precise product  
market definition can however be left open since the Transaction does not raise 
serious doubts as to its compatibility with the internal market under any plausible 
market definition.  
(230)  Geographically, the Parties submitted that the market for wet -leasing services 
would be at least EEA -wide in scope. Wet -leasing companies would be base d 
across the E EA and would typically bid for wet -leasing contracts across the EEA. 
The P arties also explained that wet -leasing companies from outside the EEA would 
need to fulfil the EEA regulatory requirements and the national requirements 
before they could offer or bid for wet -leasing contracts within the EEA (for 
example concerning the AOC , maintenance requirements for aircraft or 
insurance).196  
                                                 
192  See replies to eQ1 – Questionnaire to airlines, question 40.  
193  See replies to eQ1 – Questionnaire to airlines, question 41.  
194  See replies to eQ1 – Questionnaire to airlines, question 42.  
195  See replies to eQ1 – Questionnaire to airlines, question 43.  
196  Form CO, paragraph 1325 et seq.  
 
49 (231)  When airlines were  asked if they purchase wet -leasing services within the EEA or 
worldwide, the replies to the market investigation were mixed. Around half of the 
airlines answering explained that they purchase  at EEA level, whereas around the 
other half of the respondents purchased at worldwide level.197 Some airlines 
responding to the market investigation explained that they also supply wet -leasing 
services to other airlines, whereby around half the respondents explained that they 
supply at worldwide level whereas around the  other half of the respondents supply 
at EEA level.198 
(232)  It can however be left open if the geograph ic market for the provision of wet -
leasing services is EEA -wide or worldwide because the Transaction does not raise 
serious doubts as to its compatibility with the internal market under any plausible 
market definition.  
4.6.1.3  Franchise services  
(233)  As explained above  in paragraph (199) , the Transaction creates a verti cal link 
between Stobart Air as franchisee and Flybe as franchisor. In a previous decision, 
the Commission has not considered a franchisee as an independent competitor from 
its franchisor.199 For the purpose of the assessment of the vertical link created by 
this Transaction, the Commission will consider the provision of franchising 
services to other airlines as an upstream market and input to the operation of air 
passenger transport  services .  
(234)  Geographically, the Parties submitted that the provision of franch ising services 
might be EEA -wide, but would be at least UK and Ireland wide  (based on the 
routes operated under the Stobart Air -Flybe franchise agreement) .200 None of the 
airlines having replied to the market investigation and having expressed an opinion 
stated that they would purchase franchising services only from franchisees based in 
the same country.201  
(235)  Therefore, the Commission considers for the purpose of this decision the provision 
of franchising services to be an EEA -wide market.  
4.7 Ground -handling servic es  
4.7.1.1  Relevant product market  
(236)  Aircraft ground -handling refers to the servicing of an aircraft while it is on the 
ground. It covers a variety of airport services such as ramp services , passenger and 
baggage handling, fuel and oil handling, aircraft maintenance, ground 
administration and supervision and crew administration.  In its previous decisional 
                                                 
197  See replies to eQ1 – Questionnaire to airlines, question 44.  
198  See replies to eQ1 – Questionnaire to airlines, question 45.  
199  See Case M.6663 – Ryanair /Aer Lingus III , paragraph 459.  
200  Form CO, paragraphs 1343 et seq . 
201  See replies to eQ1 – Questionnaire to airlines, question 50 and 51.  
 
50 practice, the Commission has defined ground -handling services as a product market 
consisting of ramp, passenger, and baggage handling services as well as  airside 
cargo handling services.202  
(237)  The Parties consider that the Commission does not need to reach a view on the 
market definition in this case as the Transaction will not give rise to any horizontal 
or vertical affected markets, even on the narrowest pla usible market.203 
(238)  The Commission considers that the product market as defined in its relevant 
precedents is still appropriate. I n line with its prior decisional practice, the 
Commission will assess the effects of the Transaction on the market for the 
provisi on of ground -handling services comprising ramp, passenger, and baggage 
handling services as well as airside  cargo handling services . 
4.7.1.2   Relevant geographic market  
(239)  As regards the geographic scope for the provision (or contracting) of ground -
handling services , the Commission has in its prior decisional practice considered 
that the geographic scope of the market is restricted to a specific airport  (or 
possible two neighbouring airports) , given that the services required at a particular 
airport could not normally  be substituted by services provided at other airports.204  
(240)  The Parties consider that the Commission does not need to reach a view on the 
market definition in this case as the Transaction will not give rise to any horizontal 
or vertical affected markets, eve n on the narrowest plausible market.  
(241)  The Commission considers that, in any event, the precise definition can be left 
open as the Transaction does not raise serious doubts irrespective of the precise 
geographic market definition adopted.  
4.8 Competitive situat ion most likely to prevail absent the Transaction  
(242)  In assessing the competitive effects of a concentration, the Commission compares 
the competitive conditions that would result from the Transaction with the 
conditions that would have prevailed absent the Transaction. In most cases , the 
competitive conditions existing at the time of the Transaction constitute the 
relevant comparison for evaluating its effects. However, in some circumstances, the 
Commission may take into account future changes to the market to the extent that 
they can be reasonably predicted. It may, in particular, take account of the likely 
entry or exit of firms if the merger did not take place when considering what 
consti tutes the relevant comparison.205  
                                                 
202  See e.g. Cases M.8470 – DAAM/INFRAVIA/FIH/AI, paragraph 16; M.8137 – HNA Group/Servair , 
paragraph 51.  
203  Form CO,  paragraph 1419.  
204  See e.g. Cases M.9270 – Vinci/ Gatwick airport , paragraph 12; M.8470 – DAAM/INFRAVIA/FIH/AI , 
pargraph 19; M.8137 – HNA Group/ Servair , paragraph 52.  
205  Guidelines on the assessment of horizontal mergers under the Council Regulation on t he control of 
concentrations between undertakings, paragraph 9 (OJ C 31, 5.2.2004, p.5).  
 
51 4.8.1 Flybe’s history and financial backgr ound  
(243)  While Flybe has experienced negative operational results in three of the last four 
financial years, its financial position worsened in Spring 2018. Flybe issued a profit 
warning to the market on 3 April 2018.206 [confidential information ab out Flybe’s 
financial situation .] As recognised by Flybe’s board in approving entry into the 
share purchase agreement described in paragraph (17) above, Flybe faced an 
imminent risk of insolvency by 15 January 2019.  
(244)  In February  2019, the Parties requested a derogation  decision under Article 7(3 ) of 
the EU Merger Regulation , claiming that the suspension obligation under Article 
7(1) would cause irreparable damage to Flybe and third parties.207 
4.8.2 Failing Firm  
(245)  In the case at hand, the Notifying Parties argue that absent the T ransaction, Flybe 
would become insolvent and exit all markets since the Notifying Parties would not 
provide the financial support to this loss -making company.208  
(246)  In this context, the Notifying Parties consider that Flybe meets the criteria of the 
failing fi rm defence as set out in paras. 89 -91 of the Commission’s Horizontal 
Merger Guidelines. Namely, t he Horizontal Merger Guidelines and the case law of 
Court of Justice establish a three -pronged test to determine whether a “rescue 
merger ” may be allowed (that  is to say, a failing firm defence can be accepted) 
despite its adverse effects on competition:  
i. the allegedly failing firm would, in the near future, be forced out of the 
market because of financial difficulties if not taken over by another 
undertaking;  
ii. there is no less anti -competitive alternative purchase than the notified merger; 
and  
iii. in the absence of a merger, the assets of the failing firm would inevitably exit 
the market.209 
(247)  More generally, a merger that is found to give rise to significant impediment  of 
effective competition may be found compatible with the internal market if it can be 
proved that without the merger the competition would be deteriorated at least to the 
same extent as if the failing firm would simply disappear from the market.210 In 
that context, “the Commission may decide that an otherwise problematic merger is 
nevertheless compatible with the common market if one of the merging parties is a 
                                                 
206 Another profit warning was issued on 25 January 2019.  
207 See Derogation Decision.  
208  Form CO, paragraph 186.  
209  Horizontal Merger Guidelines, paragraph 90.  
210  Horizontal Merger Guidelines, paragraph 89.  
 
52 failing firm. The basic requirement is that the deterioration of the competitive 
structur e that follows the merger cannot be said to be caused by the merger. This 
will arise where the competitive structure of the market would deteriorate to at 
least the same extent in the absence of the merger. ”211   
(248)  It is then for the Notifying Parties to provid e in due time all the relevant 
information necessary to demonstrate that the deterioration of the competitive 
structure that follows the merger is not caused by the merger.212  
4.8.2.1  Commission ’s assessment  
(249)  The criteria of the failing firm defence as laid down in paragraphs 89 -91 of the 
Commission ’s Horizontal Merger Guidelines are cumulative. For the reasons, set 
out below, the Notifying Parties failed to demonstrate that all three criteria are met 
and therefore that the deterioration of the competitive structure that follows the 
merger is not caused by the merger.  
4.8.2.1.1  Flybe’s exit from the market  
(250)  Whilst the Commission acknowledges Flybe’s precarious financial position  as set 
out in the Derogation Decision,  it nevertheless cannot  conclude that the most likely 
scenario  absent the Transaction would be that Flybe would have  completely and 
definitively exited the market for  air transport services in the immediate or short 
term, since it considers that it does not have sufficient evidence to exclude that  
Flybe may have been  acquired by another interested purchaser instead (and, as 
such, would have continued its operations as an active provider of air transport 
services ). 
(251)  Indeed, other potential purchasers expressed interest in a possible acquisition of 
Flybe (albeit they did  not materialise into any formal offers).213  It can therefore not 
be excluded that at least parts of Flybe ’s operations would have continued in some 
form.  
4.8.2.1.2  No less anticompetitive purchaser than Connect Airways  
(252)  The Notifying Parties argue that there was no less anti -competitive alternative 
purchaser than Connect Airways that had demonstrated an ability to execute and 
complete a transaction sufficient to rescue Flybe in the required timeframe.214 
(253)  Whilst Flybe Group did receive some interest from potential purch asers (including 
from Virgin Atlantic on its own and Stobart separately215), before and during the 
                                                 
211  Horizontal Merger Guidelines, paragraph 89.  
212  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings, para 91 (OJ C 31, 5.2.2004,  p.5). See also COMP/M.308 
KALI+SALZ and Joined Cases C -68/94 and C -30/95 France and Others v Commission (Kali & Salz) 
[1998] ECR I -1375.  
213 Form CO, paragraph 187(a).  
214 Form CO, paragraph 373.  
 
53 formal sale process to acquire Flybe Group as a whole or part, no other potential 
interest materialised into an offer according to the Parties.  
(254)  The Commission  considers that, in any event, as the criteria for a failing firm 
defence are cumulative, and the first and third criteria are not met, the defence 
cannot be relied upon in this case.  
4.8.2.1.3   The assets would inevitably exit the market  
(255)  One of the cumulative crite ria laid down in the Horizontal Guidelines to accept a 
failing firm defence is that absent the merger, “the assets of the failing firm would 
inevitably exit the market ” (emphasis added).216 
(256)  Among the main assets of Flybe are the [10-20] slot pairs (for WS18;  [10-20] for 
SS18) it holds at Amsterdam Schiphol and [10-20] slot pairs (for WS18, [10-20] 
for SS18) at Paris Charles de Gaulle. In case of insolvency, and due to the severe 
congestion affecting these airports, all Flybe slots would be reallocated to othe r 
carriers, most likely via the slot pool managed by the slot coordinator. Nothing 
would prevent carriers obtaining such slots to use them on the routes where they 
are currently used by Flybe.  
(257)  Therefore, it is concluded that at least some of these slots w ould likely continue to 
be used and  these assets would not “inevitably ” exit the market.  
4.8.2.1.4   Overall causality criterion  
(258)  The overall criterion for assessing a failing firm defence requires the Notifying 
Parties to demonstrate that  the deterioration of the competitive structure (or the 
significant impediment to effective competition or “SIEC ”) that follows the merger 
is not caused by the merger .217 In the case at hand, for the reasons set out below, 
the Notifying Parties fail to demon strate this.  
(259)  Namely, in order to conclude that the Transaction is compatible with the internal 
market, it is necessary to establish whether , absent the Transaction, the competitive 
structure in the market would likely deteriorate  to a similar degree compar ed to the 
merger.  
(260)  As explained below in Section 4.8.3.1 , the Commission has indications that absent 
the Transaction, competition in the market would not deteriorate to the same extent 
as it would should the Transaction go through.  
(261)  In particular , the reallocation of Flybe ’s slots, in particular its portfolio a t highly 
congested Schiphol and congested Charles de Gaulle, would increase opportunities 
and incentives for entry and expansion by other airlines than AFKL, in particular 
on the routes of concern. The same opportunities would not arise in the post -
Transac tion scenario.  
                                                                                                                                                 
215 See Reply to RFI 2 to AFKL of 11 June 2019.  
216 See Horizontal merger guidelines, paragraph 90.  
217 See Horizontal merger guidelines, paragraph 91.  
 
54 (262)  To conclude, the overa ll causality criterion is not  fulfilled.  
4.8.2.2  Conclusion on the failing firm defence  
(263)  The Commission concludes that the Parties have failed to demonstrate that the 
criteria for meeting the failing firm test as set out in the Horizontal Merger 
Guidelines are met. In addition, it has not been shown that the deterioration of the 
competitive structure that follows from the Transaction would not be directly 
caused by the Transaction. Instead, the Transaction would most likely deter iorate 
competition beyond the extent of the deterioration that could occur absent the 
Transaction . In addition, it appears likely that the negative effects of a possible 
bankruptcy of Flybe would be short term while the negative effects likely to be 
caused  by the Transaction would be structural in nature.  
4.8.3 Most likely situation absent the Transaction  
4.8.3.1  Scenario 1: Flybe’s insolvency and market exit  
(264)  Pursuant to Article 8(2) and 10(2) of Council Regulation (EEC) No 95/93 of 18 
January 1993 on common rules for th e allocation of slots at Community airports 
(hereafter: “the EU Slot Regulation ”), a carrier holding a slot series in a given 
scheduling season is entitled to retain the same series in the next equivalent 
scheduling season if it can demonstrate to the slot  coordinator that the series of 
slots has been operated for at least 80% of the time during the scheduling period for 
which it has been allocated for the operation of scheduled and programmed non -
scheduled air services. This is referred to as the “use-it-or-lose-it” rule. 
(265)  If the Commission considers the scenario that Flybe would have exited the market , 
it would take account  of the fact  that, in such  case, Flybe’s slots would be made 
available to other carriers during or shortly before the insolvency proceed ings,  e.g. 
through fall back to the slot pools and subsequent reallocation by  the relevant slot 
coordinators, including in Amsterdam .  
(266)  The relatively short timespan before slots would be withdrawn in application of 
this rule, part – and probably most of – Flybe’s  slots at Amsterdam and Paris  for 
the ongoing season would end up in the slot pool. Indeed, Flybe ’s liquidator / 
administrator would likely face diffi culties to transfer Flybe’s activity including the 
slots linked to it  before these slots fall back to the pool in application o f the “use-it-
or-lose-it” rule. As regards slots for the following season, Flybe  (or its liquidator) 
may have more time to transfer Flybe’s activity including the slots linked to it . 
However , AFKL  would be unlikely to be the onl y air carrier being transferred  these 
slots, for the reasons explained below.  
(267)  Amsterdam  Schiphol Airport  is generally known to be heavily congested, and Paris 
Charles De Gaulle also constitutes  a congested airport, which means that available 
slots at these  airports are insufficient to satisfy airlines ’ demand. In that context, in 
case of Flybe ’s exit from the relevant market s, all the slots currently held by Flybe  
would be very likely to be taken up, e.g. through re -allocation via the pool.218 
                                                 
218 As regards the slots that would fall back to the pool, pursuant to Article 10(6) of the EU Slot 
Regulation, 50 % of the slots included in the pool are destined to incumben ts and 50% to airlines which 
qualify as "new entrants" under Article 2(b) of the above -mentioned Regulation. In practice, numerous 
airlines would qualify as potential new entrants at Amsterdam and in Paris.  
 
55 Moreover, a sig nificant proportion of Flybe ’s slots (most likely 50%219) at 
Amsterdam  and Paris  would be likely to end up with other carriers than AFKL,220 
unlike in the post -Transaction scenario where AFKL would indirectly take control 
of all these slots.  The fact that a relatively large portfolio of slots at Amsterdam and 
Paris airports  would be made available through reallocation via the pool would 
significantly facilitate the implementation of potential  entry plans  by other airlines . 
(268)  Therefore, one diff erence between this scenario  and the post -Transaction situations 
relates to the distribution of slots at Amsterdam  Schiphol and Paris Charles De 
Gaulle . In the absence of the Transaction, the likelihood that carriers other than 
AFKL may acquire part of Flybe’s slot portfolio at Amsterdam  and Paris  and enter 
routes where AFKL would be in a monopoly or dominant position because of 
Flybe’s exit, would be higher than in the post -Transaction situation, where the 
entirety of Flybe ’s slot portfolio would be (indir ectly) controlled by AFKL. Indeed, 
post-Transaction, due to the heavy congestion prevailing at Amsterdam  Schiphol 
and Paris Charles de Gaulle , entry opportunities would remain strongly limited by 
the scarcity of slots whereas in absence of the Transaction,  entry barriers would be 
lowered by the reallocation via the pool of Flybe's slots portfolio between various 
carriers . 
(269)  The Transaction is not expected to have the same effect  as Flybe ’s market exit on 
potential new entrants’ incentives to enter/expand on r outes . This is  because 
Flybe’s exit would lead to an i mmediate reduction in capacity on the se routes , 
whereas post -Trans action, this capacity would be taken  up by AFKL . The capacity 
which disappears as a consequence of Flybe’s exit would create an incentive for 
other carriers to enter the route in order to respond to the remaining demand and  
thereby increase more (than post -Transaction) their incentives to enter/expand . 
(270)  It thus appears that in this scenario , Flybe’s exit would have heightened other 
carrier's incentives to enter the exited routes, at least to some extent. Besides, as 
explained above, the ability of these carriers to enter would have been heightened 
by the reallocation of Flybe’s slots at Amsterdam and Paris.  
(271)  In conclusion, post -Trans action, AFKL  would likely be less threatened by new 
entries on the routes where Flybe currently operates than in this scenario (i.e. 
Flybe’s market exit) . This is due to lower incentives and higher barriers to entry in 
the post -Transaction scenario than in  this insolvency scenario .  
4.8.3.2  Scenario 2: Flybe’s continuation of operations  
(272)  As mentioned above, the Commission does not consider that it has sufficient 
evidence to conclude that Flybe ’s exit from the market and the cessation of its 
operations as an independ ent air carrier would be the most likely situation absent 
the Transaction, since it may have been acquired by another purchaser and 
continued its operations on the market for air transport services as such.  Indeed, 
other potential purchasers expressed inte rest in a possible acquisition of Flybe 
                                                 
219 See EU Slot Regulation, Article 10(6).  
220 There is no reason why the reallocated slots should all end up with AFKL should Flybe become 
insolvent.  
 
56 (albeit they did not materialise into any formal offers).221  It can therefore not be 
excluded that at least parts of Flybe ’s operations would have continued in some 
form . 
(273)  In particular, earlier in 2018, Virgin Atlantic showed interest in acquiring 100% of 
Flybe  and considered making an offer for Flybe on its own, as did Stobart .222 
(274)  If, absent the Transaction, Flybe would not have become insolvent, because an 
alternative buyer  (whether Virgin Atlantic  on its  own or Stobart or  other)  would 
have taken over all or parts of Flybe, the latter  would have continued its operations 
on many or all of the relevant routes and would have continued to exert a 
competitive pressure on AFKL on these routes, remaining in contr ol over its slots 
at the relevant airports (at least those not lost under the “use it or lose it ” rule). This 
competitive pressure would be removed following the proposed Transaction.  
4.8.4 Conclusion  
(275)  For the purpose of this Decision, the Commission does not ne ed to take a firm 
position as to whether, absent the Transaction, Flybe would have exited the market 
and ceased all operations, or would have continued following the acquisition by an 
alternative purchaser , as the Transaction raises serious doubts as to it s 
compatibility with the internal market under both scenarios . Namely, the 
Transaction would most likely impede competition beyond the extent of the 
impediment that could occur under either possible  scenario absent the Transaction . 
4.9 Competitive situation for the assessment of air/rail overlaps  
(276)  As stated above,  when assessing  the competition effects of a proposed transaction 
under the Merger Regulation, the Commission  needs to compare the competitive 
conditions that would result from the notified concentra tion with those that would 
have prevailed in the absence of the concentration. As a general rule, the 
competitive conditions prevailing at the time of notification constitute the relevant 
framework for evaluating the effects of a transaction. In some circu mstances, 
however, the Commission may take into account future changes to the market that 
can be reasonably predicted.223  
(277)  The Parties explained that Virgin Trains currently operates the West Coast Train 
Franchise in the United Kingdom. Virgin Trains has operated the West Coast Train 
Franchise since October 2012 . The West Coast Train Franchise was extended  in 
December 2018 until March 2020.  The Department for Transport has an option to 
terminate the franchise from November 2019 on.224 The West Coast Train 
Franchise  will be replaced by the West Coast Partnership franchise. When the West 
                                                 
221 Form CO, paragraph 187(a).  
222 See Reply to RFI 2 to AFKL of 11 June 2019.  
223  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings, paragraph 9 (OJ C 31, 5.2.2004, p.5).  
224  Form CO, paragraph 250 and 552 et seq . 
 
57 Coast Partnership franchise begins, the West Coast Franchise will be terminated.225 
As a result, the West Coast Train Franchise will expire before March 2020, most 
likely around November 2019.226  
(278)  The West Coast Partnership franchise is awarded through a tender process by the 
UK DfT. The consortium involving Virgin Group was disqualified from the tender 
process in relation to the West Coast Partnership franchise.227  
(279)  [confidential str ategic information related to Virgin Trains’ disqualification from 
the West Coast Partnership ]228 
(280)  The Commission notes that for Virgin Trains to be awarded the West Coast 
Partnership franchise, the consortium involving Virgin Trains would need to 
challenge t he decision in court, be successful in this challenge, be re -admitted to 
the tender process and be ultimately selected as the successful bidder in the tender 
process.  
(281)  Due to these uncertainties, t he Commission considers that for the purpose of this 
decisi on, it cannot be reasonably predicted that Virgin Trains would be awarded the 
West Coast Partnership franchise . The Commission will therefore assess the effects 
of this Transaction against a situation absent the Transaction in which Virgin 
Trains operates train services on the London -Edinburgh, Birmingham -Glasgow, 
Birmingham -Edinburgh, Edinburgh -Manchester and Glasgow -Manchester routes 
until November 2019 and a third  party train operator operates these routes under the 
West Coast Partnership Franchise as of  November 2019. As a result, the 
Transaction gives only rise to air/rail overlaps until November 2019.  
5. COMPETITIVE ASSESSMENT  
5.1  Passenger air transport services  
5.1.1 Passenger air transport services under the O&D approach  
5.1.1.1  Flybe’s and Virgin Atlantic’s (including its shareholder s’) business models in 
air passenger transport  
(282)  Flybe  is a UK regional airline and currently operates passenger services on 190 
routes from 73 departure points in the UK. Flybe operates a fleet of 76 aircraft. 
Flybe operates short -haul flights primarily within the UK and between the UK and 
Continental Europe. Flybe’s operations are not based around specific airports, its 
                                                 
225  Form CO, paragraph 596.  
226  Form CO, paragraph 601.  
227  Form CO, paragraph 596.  
228  Form CO, paragraph 598.  
 
58 business model was described by the Parties as most akin to a point -to-point 
model.229 
(283)  Virgin Atlantic  is operatin g long -haul flights from the United Kingdom to 34 
destinations worldwide. Virgin Atlantic does not operate flights within the UK or 
any short -haul routes.  
(284)  Delta  is an US airline. Delta’s network was explained by the Parties to be operated 
on a system of h ub and key airports, for example Minneapolis -St. Paul, New York -
LaGuardia and New York -JFK, Amsterdam, Paris -Charles de Gaulle and London 
Heathrow. Delta does not operate routes within the UK or any European short -haul 
routes.  
(285)  AFKL  operates a network organ ised around Paris -Charles de Gaulle and 
Amsterdam. It operates short -haul flights within Europe as well as long -haul flights 
worldwide. AFKL does not operate on any domestic UK routes.   
5.1.1.2  Treatment of Stobart Air and its franchise agreements  
(286)  Stobart Air oper ates on routes out of the UK and Ireland pursuant to franchise 
agreements with Aer Lingus (on a number of routes between Dublin and Cork and 
the United Kingdom) and Flybe (on a number of routes between the United 
Kingdom and Continental Europe).  
(287)  In a prev ious decision, the Commission has concluded that Aer Arann (who was 
taken over by Stobart Group) operated flights pursuant to a franchise agreement 
with Aer Lingus, cannot be considered as an independent competitor from Aer 
Lingus and that it is appropriat e to add Aer Arann’s shares of the market to those of 
Aer Lingus for the purpose of the competitive assessment.230  
(288)  The key terms of Aer Lingus – Stobart Air franchise agreement and the Flybe – 
Stobart Air franchise agreement are as follows.  
(289)  Stobart Air as the franchisee bears the commercial risk for the performance on the 
routes that it operates pursuant to the franchise agreement, including setting the 
prices on these routes.231  
(290)  Under the Aer Lingus -Stobart Air franchise agreement, Stobart Air pays a franch ise 
fee to Aer Lingus and Flybe, respectively.232 
(291)  Stobart Air operates its routes using Aer Lingus and Flybe’s brand and flight 
numbers. Stobart Air uses the Aer Lingus Regional brand and operates under Aer 
                                                 
229  Form CO, paragraph 232 et seq . 
230  See Case M.6663 – Ryanair/Aer Lingus III , paragraphs 431 et seq.   
231  Form CO, paragraph 319 et seq . 
232  Form CO, paragraph 321 and 322.  
 
59 Lingus’ code (EI). For flights operated under the F lybe-Stobart Air franchise 
agreement, Stobart Air uses Flybe’s brand and code.233  
(292)  [confidential information about  Stobart Air’s franchise agreements with Aer Lingus 
and with Flybe ]234  
(293)  [confidential information about marketing in relation to Stobart Air’s franchise 
agreements with Aer Lingus and with Flybe ] For example, the Stobart Air routes 
under the Flybe -Stobart Air franchising agreement are advertised on Flybe’s 
website as Flybe flights “operated by Stobart Air ”. Destinations only served under 
the Flyb e-Stobart Air franchise agreement are advertised as Flybe destinations and 
the timetables of Stobart Air’s routes under the franchise agreement are displayed 
as Flybe flights on Flybe’s website. [confidential marketing information about 
marketing in relati on to Stobart Air’s franchise agreements with Aer Lingus and 
with Flybe ] 235 
(294)  [confidential information about Stobart Air’s franchise agreements with Aer Lingus 
and with Flybe ]236 
(295)   [confidential marketing information about Stobart Air’s franchise agreements with 
Aer Lingus and with Flybe ] 237  
(296)  It appears therefore that Stobart Air cannot be considered as an independent 
competitor from Flybe and Aer Lingus, respectively. The Commission is thus 
considers it appropriate to add Stobart Air’s market shares to the ma rket shares of 
Flybe and Aer Lingus, respectively, for the purposes of the competitive assessment.  
5.1.1.3  Treatment of interlining and codeshare agreements for the purpose of the 
competitive assessment  
(297)  Airlines operating scheduled air passenger transport service s can enter into 
cooperative agreements with other airlines.  
(298)  An interline agreement is a commercial agreement between airlines to enable one 
airline to book passengers on another airline’s flights and the passengers to travel 
on one ticket despite their j ourney being on flights operated by multiple airlines. It 
also enables passengers to check their bags from the point of origin through to their 
final destination.  
(299)  In case of an interline agreement, the carrier which issues the main itinerary ticket 
does n ot market the flight operated by the third -party carrier as its own and does 
not determine the fare for the flight operated by the third -party carrier. The carrier 
                                                 
233  Form CO, paragraph 324.  
234  Form CO, paragraph 324.  
235  Form CO, paragraph 324.  
236  Form CO, par agraph 324.  
237  Form CO, paragraph 324.  
 
60 selling the ticket to the passenger for an interline itinerary collects the entire fare. 
The third -party carrier that transports the passengers then bills the carrier which 
issued the tickets and collects the fare.238   
(300)  Interlining agreements between airlines can be based on IATA’s Multilateral 
Interline Traffic Agreement ( “MITA ”) or on a bilateral interline traffic agreement 
(“BITA ”). MITA enables an airline to interline with other airlines signed up to the 
MITA without having to enter into a separate bilateral agreement.239 In the case of 
BITA, the airlines participating prorate the revenue relating to the itinerary on 
terms that are commercially negotiated between the airlines on a bilateral basis.240 
(301)  Codeshare agreements allow flights operated by one airline to be marketed also by 
its codeshare partner under its own code.241 In a codeshare, the marketin g carrier 
adds its own code on flights operated by the operating carrier and markets them via 
its own distribution network.242,243  
(302)  Codeshares can be unilateral or parallel. The codeshare is unilateral if only one 
codeshare partner is operating on the route; i t is parallel when both codeshare 
partners fly on the route and codeshare on each other ’s flights. Unilateral codeshare 
allows the marketing carrier to expand its network by allowing it to reach 
destinations to which it does not fly its own aircraft. Throu gh parallel codeshare, 
carriers can increase frequencies without deploying additional aircraft. Parallel 
codeshare normally allows for fare combinability, which enables passengers to fly 
on each leg of a roundtrip with different carriers. In both unilatera l and parallel 
codeshares, the operating carrier receives indirect access to the distribution network 
and customer base of the marketing carrier(s).244  
(303)  Seats on flights operated by a codeshare partner can be sold on a “free flow ” (also 
known as “free-sell”) or “blocked space ” basis. In a free-flow codeshare , the 
marketing carrier can sell codeshare seats as long as there are seats available. As it 
acts as an agent of the operating carrier, the marketing carrier does not bear any 
economic risk. In order to monitor seats availability in each booking class, the 
marketing carrier has access to the operating carrier ’s IT system in real time. In a 
blocked space codeshare , the marketing carrier can purchase a block of seats from 
                                                 
238  Form CO, paragraphs 309 and 311.  
239  Form CO, paragraphs 308 et seq.  
240  Form CO, paragraph 312.  
241  In computer reservation systems, each airline is identified by a two -letter "airline designator code".  
242  See e.g. Case M.7333 – Alitalia/Etihad , paragraph 156 et seq . 
243  As explained above in Section 4.6, under a franchise agreement, the franchisee operates with its own 
aircraft, crew, maintenance, insurance and slots, using the brand and livery of the franch isor. The 
franchisee bears the commercial risk, including setting fares, and pays a franchise fee to the franchisor. 
The flight is operated under the franchisor’s flight number and it is the franchisor who sells and 
distributes the tickets. The Commission has assessed the treatment of Stobart Air and its franchise 
agreements for the purpose of this decision in Section 5.1.1.2.  
244  See e.g. Case M.7333 – Alitalia/Etihad , paragraph 156 et seq . 
 
61 the operating carrier in advance an d resell them under its own code. Blocked space 
codeshares can be further distinguished in “soft” and “hard” block. In a “soft 
block ” codeshare, the marketing carrier has an option to return some or all of the 
unsold seats to the operating carrier at an ag reed number of days before departure. 
Under this system, the economic risk can lay mainly on the marketing carrier or the 
operating carrier depending on the specific features of the agreement. In a “hard 
block ” codeshare, the marketing carrier cannot in pr inciple return the tickets it has 
purchased and therefore the economic risk lies on it.245 
(304)  Codeshare agreements are a common feature of the air passenger transport industry 
and it is not unusual for carriers to have in place at any given time a substantial 
number of agreements with multiple carriers.246  
Flybe’s and AFKL’s […] codeshare agreements  
(305)  Flybe has a […] codeshare agreement with Air France on the following routes: 
Birmingham -Paris Charles de Gaulle  (CDG) , Manchester -Paris CDG  and 
Edinburgh -Paris CDG .  
(306)  Air France and Flybe both operate the Birmingham -Paris CDG  and the 
Manchester -Paris CDG  routes and , in addition,  codeshare on each other’s flights on 
these two routes within the scope of the […].247 These two routes are assessed as 
direct -direct operating ov erlaps in the competitive assessment.  
(307)  The Edinburgh -Paris CDG  route is only operated by Air France. Flybe does not 
operate a direct connection on this route with its own metal.248 Flybe puts its code 
on and sells tickets for these Air France operated flight s […].249 The Commission 
will therefore apply the most conservative approach and assess the Edinburgh -Paris 
Charles de Gaulle route as an operating overlap route […]. It is however not 
necessary to assess in detail […] for the Edinburgh -Paris Charles de Gaul le route, 
since no competition concerns arise even under this most conservative approach.  
Flybe ’s and AFKL ’s interlining and […] codeshare agreements  
(308)  The Parties have identified 39 direct -direct marketing overlaps. These are routes on 
which either Flybe or AFKL operates and the other carrier is able to book 
passengers onto the flight of the operating carrier as a result of interlining or 
codeshare agreements.250 On two routes, the marketing overlap arises as a result of 
                                                 
245  See e.g. Case M.7333 – Alitalia/Etihad , paragraph 156 et seq . 
246  See e.g. Case M.7333 – Alitalia/Etihad , paragraph 156 et seq .  
247  Form CO, footnote 265.  
248  Form CO, paragraph 517.  
249  Form CO, paragraph 533 and footnote 265.  
250  Form CO, paragraph 533.  
 
62 interlining,251 on the other routes the marketing overlap arises as a result of a […] 
codeshare agreement between Flybe and AFKL.252,253  
(309)  The Parties do not view the two routes overlapping as a result of an interline 
agreement  to constitute a “marketing overlap ”. They explain that the code of the 
operating carrier [...] remains on the tickets, which means that the operating carrier 
is also marketing the tickets with its own code (the interlining partner airline, - 
[…]) - is only issuing and pricing the tickets but its code does not appear on the 
tickets). [confidential information about Flybe’s commercial agreements ] 254  
(310)  The Commission concludes that since […] is only issuing tickets because of 
interlining in the framework of MITA, it is not active on a market with regard to 
those two routes. Therefor e, the activities of Flybe and AFKL do not overlap 
concerning these two routes.  
(311)  With regard to the […] codeshare agreement , the Parties explained that under a 
[…] codeshare agreement, […]. The marketing carrier would price independently 
of the operating c arrier and receive a percentage commission for the flights that it 
sells on a marketing carrier basis.255 The marketing carrier would be subject to the 
inventory availability from the operating carrier on any given day or time, which 
means that the marketing carrier has no certainty of availability. If the marketing 
carrier would not sell a seat, […]. The mar keting carrier also would have no ability 
to determine flight schedules or frequencies.256  
(312)  Considering these arguments, the Commission concludes that the marketing carrier 
is not active on routes, which it only markets because of a […] codeshare 
agreement. Therefore, the activities of Flybe and AFKL do not overlap concerning 
the routes identified by the Parties as marketing overlaps.  
(313)  In any case, for the avoidance of doubt, should this be viewed differently and these 
routes be assessed as overlap routes ( quod non ), no serious doubts would arise for 
the following reasons:  
                                                 
251  These are the routes […] and […], Form CO, paragraph 533, footnote 263.  
252  These are the following routes: Aberdeen -Paris, Avignon -Birmingham, Avignon -Southampton, 
Birmingham -Bastia, Birmingham -Biarritz, Birmingham -Bordeaux, Birmingham -Chambery, 
Birmingham -Bergerac, Birmingham -Guernsey,  Birmingham -Jersey, Birmingham -Lyon, Birmingham -
Rennes, Bordeaux -Southampton, Caen -London, Chambery -Cardiff, Chambery -Exeter, Chambery -
Manchester, Chambery -Southampton, Cardiff -Paris, Du esseldorf -Manchester, Bergerac -Exeter, 
Bergerac -Manchester, Bergerac -Southampton, Exeter -Paris, Exeter -Rennes, Glasgow -Manchester, 
Limoges -Southampton, London -Rennes, La Rochelle -Manchester, La Rochelle -Southampton, Lyon -
Manchester, Manchester -Milan, Manchester -Nantes, Manchester -Rennes, Newcastle -Paris, 
Southampton -Paris, P erpignan -Southampton, Rennes -Southampton, Form CO, paragraph 533, 
footnote 263 and reply of the Parties to QP7 of 3 May 2018, question 8 (as amended in QP7a).  
253  Form CO, paragraph 533, footnote 264.  
254  Reply of the Parties to QP7 of 3 May 2019, question 8  (as amended in QP7a).  
255  Reply of the Parties to QP7 of 3 May 2019, question 8 (as amended in QP7a).  
256  Form CO, paragraph 533.  
 
63 (314)  The Commission has found in its prior decision practice that for routes on which 
the activities of airlines overlap due to a unilateral codeshare, the Transaction could 
give rise to serio us doubts as to its compatibility with the internal market only if (i) 
despite the codeshare agreements, the operating carrier and the marketing carrier 
exert a significant constraint on each other as actual competitors for the sales of 
seats on the operat ing carrier's flights; or (ii) there is a significant likelihood that 
the marketing carrier would grow into an effective competitive force, e.g. by 
starting to operate on the route with its own aircraft. It was found that anti -
competitive effects might occ ur in particular where the marketing carrier is very 
likely to incur the necessary sunk costs to enter the relevant codeshare route as an 
operating carrier in a relatively short period.257  
(315)  As already explained above, under the […] codeshare agreements betwe en AFKL 
and Flybe, the marketing carrier receives a commission for each of the tickets it 
sells. The marketing carrier prices independently of the operating carrier. However, 
the incentives for the marketing carrier to price aggressively are limited. The 
commission the marketing carrier receives for the flights it sells on a marketing 
carrier basis is a percentage of the fare it charges for the ticket, most commonly 
[…]% of the fare.258 Therefore, the higher the price at which the marketing carrier 
sells the tickets, the greater its commission per ticket will be.  
(316)  The likelihood that the marketing carrier would represent a material competitive 
constraint for the operating carrier is further limited by the operating carrier ’s 
ability to terminate the codeshare agreement if the marketing carrier started to offer 
fares substantially lower than the operating carrier, thus depriving the marketing 
carrier of any benefit of an aggressive pricing policy. In the case at hand, either 
party to the […] codeshare can termin ate the respective codeshare agreement for 
any reason at […].259 
(317)  As a result, should the marketing overlaps be assessed as overlap routes, the 
Commission concludes that the marketing carrier does not exert more than a 
residual constraint on the operating car rier.  
(318)  Furthermore, the Parties’ explained that, in the absence of the Transaction, neither 
[confidential strategic information on Flybe and AFKL future operations] .260  
5.1.1.4  Methodology to calculate market shares  
(319)  The Commission has previously used Marketing Info rmation Data Tapes 
(“MIDT ”) data261 and PaxIS PLUS data262 as appropriate proxies to estimate 
market shares for air transport of passengers.  
                                                 
257  See Case M.7333 – Alitalia/Etihad , paragraph 160.  
258  Reply of the Parties to QP7 of 3 May 2019, question 8 (as amended in  QP7a).  
259  Reply of the Parties to QP7 of 3 May 2019, question 8 (as amended in QP7a).  
260  Reply of the Parties to QP7 of 3 May 2019, question 8 (as amended in QP7a).  
261  See e.g. Cases M.6447 – IAG/bmi ; M.5889 – United Airlines/Continental Airlines ; M.5747 – 
Iberia/British Airways . 
 
64 (320)  To take account of the increasing number of direct sales, the Commission has 
considered it necessary in the most recen t airline merger case, to use a data source 
that captures direct sales by the Parties and their competitors  and considered Direct 
Data Solutions ( “DDS ”) data as the best proxy .263 DDS is an IATA database.264 
(321)  The DDS database includes data from the IATA Billing and Settlement Plan, the 
Amadeus Airline booking system as well as direct and indirect data contributed by 
airlines. DDS includes the actual booking data from the carriers subscribing to it. 
To the exten t that direct and indirect booking data for an airline is not contributed, 
an algorithm is applied to estimate the market shares for those airlines.265, 266 
(322)  The Commission is of the view that DDS data are the best proxy to estimate market 
shares and are approp riate for the assessment of the affected overlap routes in this 
case.  
(323)  The O&D assessment in the following sections of this decision is based on point -
to-point bookings only, because connecting passengers are not included in the 
relevant O&D market.267 
5.1.1.5  Direc t-direct operating overlaps268 
(324)  The transaction gives rise to six direct -direct operating overlap routes between the 
UK and Continental Europe, all resulting from overlaps between Flybe and 
AFKL.269  
                                                                                                                                                 
262  See e.g. Cases M.7333 – Alitalia/Etihad , paragraphs 135 et seq. ; M.7541 – IAG/Aer Lingus , 
paragraphs 135 et seq.   
263  See Case M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 179 et seq.  
264  See e.g. https://www.iata.org/services/statistics/intelligence/Pages/direct -data-solutions.aspx .  
265  Form CO, paragraph 329 et seq.  
266  The Commission has in previou s cases considered that most of the services offered by charter 
companies (package holiday sales, seat sales to tour operators) are not in the same market as scheduled 
point -to-point air passenger transport services. However, as regards charter carriers se lling dry seats 
(seats only without other services) and scheduled point -to-point air passenger transport services, the 
Commission has left open whether they are part of the same relevant product market, see e.g. Case 
M.6663 – Ryanair/Aer Lingus III, paragr aph 418 et seq . The DDS data submitted is an appropriate 
proxy to assess scheduled point -to-point air passenger transport services, because it does not include 
charter flights, see Form CO, paragraph 329.  
267  Form CO, paragraph 329 and 333.  
268  Both Flybe an d AFKL operated the Amsterdam -Southampton route during the Winter 2017/2018 
IATA Season and Summer 2018 IATA Season. However, in December 2018, KLM announced that it 
will cease operating this route as of March 2019. The decision to exit this route was take n by KLM 
independently and prior to the Transaction, see Form CO, paragraph 527. Therefore, the Amsterdam -
Southampton will not be assessed as an affected direct -direct overlap route in this decision.  
269  As regards potential substitutability between relevan t airports, please refer to Section 4.1.4 above.  
 
65 5.1.1.5.1  London -Amsterdam  
(325)  In the Summer 2018 IATA Season, [300,000 -400,000]  passengers travelled 
between London City and Amsterdam airports and [900,000 -1,000,000]  passengers 
flew between London City/ London Heathrow and Amsterdam airports. In Winter 
2017/2018 IATA Season, [200,000 -300,000]  passengers travelled between Londo n 
City and Amsterdam airports and [600,000 -700,000]  passengers flew between 
London City/ London Heathrow and Amsterdam airports.270 
(326)  In Summer 2018 and Winter 2017/2018 IATA Seasons, both Flybe and AFKL 
operated direct services on the London City -Amsterdam ai rport pair. In addition, 
AFKL operated direct services on the London Heathrow -Amsterdam airport pair in 
both seasons. Neither Virgin Atlantic, nor Delta or Stobart Air operated on the 
London -Amsterdam city pair.271 
(327)  The Commission will therefore assess the ef fect of the Transaction on the London 
City-Amsterdam and London Heathrow/London City -Amsterdam airport pairs. If 
other London airports were considered substitutable with London City or with 
London City and London Heathrow airport, the Parties’ combined market shares 
and market position post -Transaction would necessarily be lower than on the 
London City -Amsterdam and London Heathrow/London City -Amsterdam airport 
pairs.  
(328)  The table below provides the market shares and frequencies of AFKL and Flybe as 
well a s its biggest competitor British Airways on London City -Amsterdam airport 
pair.  
  Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 AFKL  Flybe  Combined  British 
Airways  AFKL  Flybe  Combined  British 
Airways  
Market 
share  [50-
60]% [5-
10]% [60-70]% [30-
40]% [40-
50]% [5-
10]% [50-60]% [40-
50]% 
Weekly 
frequencies  45 8 53 29 41 9 50 32 
 
(329)  The table below provides the market shares and frequencies of AFKL and Flybe as 
well as its biggest competitor British Airways on London City/London Heathrow -
Amsterdam airport pair.  
                                                 
270  Form CO, paragraphs 431 and 433.  
271  Form CO, paragraph 423. The Parties submit that the DDS data shows minor bookings for Delta on 
this city pair on a marketing carrier basis. As explained above, the sta rting point for the Commission’s 
assessment of the Transaction is a market structure in which Virgin Atlantic is jointly controlled by 
AFKL, Delta and Virgin Group. Therefore, applying the most conservative approach, the Commission 
has included those minor  bookings for Delta on a marketing carrier basis in AFKL’s market share. 
However, taking those bookings into account in AFKL’s market share does not change to any material 
extent AFKL’s market share or market position.  
 
66  Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 AFKL  Flybe  Combined  British 
Airways  AFKL  Flybe  Combined  British 
Airways  
Market 
share  [50-
60]% [0-
5]% [50-60]% [40-
50]% [50-
60]% [0-
5]% [50-60]% [40-
50]% 
Weekly 
frequencies  116 8 124 84 113 9 121 90 
  
(330)  British Airways is UK airline. It carries more than 40 million passengers a year and 
has a fleet of nearly 300 aircraft.272 British Airways is a competitor with a strong 
presence in the United Kingdom. It has its main hub at London Heathrow and it 
operates bases at London City and London Gatwick.273 The Commission conside rs 
that o n both airport pairs, the Parties will face significant competition from British 
Airways post -Transaction.  
(331)  The Commission therefore considers that the competitive constraints on the Parties 
would be sufficient to prevent them from raising prices post-Transaction on the 
London -Amsterdam route.  
(332)  Finally, the majority of respondents to the market investigation having expressed a 
view considers that there will be sufficient competition on the route to prevent the 
Parties from raising prices post -Trans action.274  
(333)  In the light of the above, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market with respect to 
the London -Amsterdam route under any plausible market definition .  
5.1.1.5.2  Manchester -Amsterdam  
(334)  In the Summer 2018 IATA Season, [300,000 -400,000]  passengers travelled 
between Manchester and Amsterdam airports and [400,000 -500,000]  passengers 
flew between Manchester/ Leeds Bradford and Amsterdam airports. In Winter 
2017/2018 IATA Season, [200,000 -300,000]  passengers travelled between 
Manchester and Amsterdam airports and [300,000 -400,000]  passengers flew 
between Manchester/ Leeds Bradford and Amsterdam airports.275 
(335)  In Summer 2018 and Winter 2017/2018 IATA Seasons, both Flybe and AFKL 
operated d irect services on the Manchester -Amsterdam airport pair. In addition, 
AFKL operated direct services on the Leeds Bradford -AMS airport pair in both 
                                                 
272  See reply to eQ1 – Questionnaire to airlines, question 1.  
273  See Case M.7541 – IAG/Aer Lingus , paragraph 4.  
274  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
275  Form CO, paragraphs 442 and 446.  
 
67 seasons. Flybe and AFKL did not operate direct services on Liverpool John 
Lennon -Amsterdam airport pair. Neit her Virgin Atlantic, nor Delta or Stobart Air 
operated on the Manchester -Amsterdam city pair.276  
(336)  The Commission will therefore assess the effect of the Transaction on the 
Manchester -Amsterdam and Manchester/Leeds Bradford -Amsterdam airport pairs. 
If Liverpo ol John Lennon airport were considered substitutable with Manchester 
airport or with Manchester and Leeds Bradford airport, the Parties’ combined 
market shares and market position post -Transaction would necessarily be lower 
than on Manchester -Amsterdam and  Manchester/Leeds Bradford -Amsterdam 
airport pairs.  
(337)  The table below provides the market shares and frequencies of AFKL and Flybe as 
well as its biggest competitor easyJet on the Manchester -Amsterdam airport pair.  
 Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 AFKL  Flybe  Combined  easyJet  AFKL  Flybe  Combined  easyJet  
Market 
share  [30-
40]% [10-
20]% [50-60]% [40-
50]% [20-
30]% [20-
30]% [50-60]% [40-
50]% 
Weekly 
frequencies  41 21 63 18 34 27 61 20 
 
(338)  The table below provides the market shares and frequencies of AFKL and Flybe as 
well as its biggest competitor easyJet on the Manchester/Leeds Bradfort -
Amsterdam airport pair.  
 Summer 2018 IATA Season  
 Winter 2017/2018 IATA Season  
 
 AFK
L Flyb
e Combin
ed easyJ
et Jet2 AFK
L Flyb
e Combin
ed easyJ
et Jet2 
Market 
share  [30-
40]% [10-
15]
% [50-
60]% [30-
40]% [5-
10]
% [30-
40]% [20-
30]
% [50-
60]% [30-
40]% [5-
10]
% 
Weekly 
frequenci
es 62 21 83 18 7 54 27 80 20 7 
  
                                                 
276  Form CO, paragraph 437. The Parties submit that the DDS data shows minor bookings for Delta on 
this city pair on a marketing carrier basis. As explained above, the starting point for the Commission’s 
assessment of the Tran saction is a market structure in which Virgin Atlantic is jointly controlled by 
AFKL, Delta and Virgin Group. Therefore, applying the most conservative approach, the Commission 
has included those minor bookings for Delta on a marketing carrier basis in AFK L’s market share. 
However, taking those bookings into account in AFKL’s market share does not change to any material 
extent AFKL’s market share or market position.  
 
68 (339)  easyJet is a low-cost point -to-point airline domiciled in the United Kingd om that 
operates in the European short -haul aviation market and is focused primarily on 
Western and Northern Europe. Between August 2016 and August 2017, easyJet 
carried more than 79 million passengers and had, in 2017, a fleet of 279 aircraft.277 
Jet2 is a UK airline primarily operating scheduled air passenger transport services 
between the United Kingdom and Europe. Jet2 has a fleet of around 90 aircraft.278  
(340)  On both airport pairs, the Parties will face significant competition from easyJe t, but 
also from Jet2  post-Transaction. The Commission therefore considers that the 
competitive constraints on the Parties would be sufficient to prevent them from 
raising prices post -Transaction on the London -Amsterdam route.  
(341)  Finally, the majority of res pondents to the market investigation having expressed a 
view considers that there will be sufficient competition on the route to prevent the 
Parties from raising prices post -Transaction.279  
(342)  In the light of the above, the Commission considers that the Transa ction does not 
raise serious doubts as to its compatibility with the internal market with respect to 
the Manchester -Amsterdam route under any plausible market definition .  
5.1.1.5.3  Birmingham -Amsterdam  
(343)  In the Summer 2018 IATA Season, [200,000 -300,000]  passengers tr avelled 
between Birmingham and Amsterdam airports and [100,000 -200,000]  passengers 
in Winter 2017/2018 IATA Season.280 
(344)  In Summer 2018 and Winter 2017/2018 IATA Seasons, both Flybe and AFKL 
operated direct services on the Birmingham -Amsterdam airport pair. Ne ither Virgin 
Atlantic, Delta or Stobart Air operated on the Birmingham -Amsterdam city pair.281  
(345)  The table below provides the market shares and frequencies of AFKL and Flybe on 
the Birmingham -Amsterdam airport pair.  
 
                                                 
277  See e.g. Case M.8672 – easyJet/Certain Air Berlin  assets, paragraphs 2 et seq.  
278  See reply to eQ1 – Questionnaire to airlines, question 1.  
279  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
280  Form CO, paragraphs 462.   
281  Form CO, paragraph 451. The Parties submit that the DDS data shows minor bookings for Delta on 
this city pair on a marketing carrier basis. As explained above, the starting point for the Commission’s 
assessment of the Transaction is a market structure in which Virgin Atlantic is jointly controlled by 
AFKL, Delta and Virgin Group. Therefore, applying the most conservative approach, the Commission 
has included those minor bookings for Delta on a marketing carrier basis in AFKL’s market share. 
However, taking those bookings into acco unt in AFKL’s market share does not change to any material 
extent AFKL’s market share or market position.  
 
69   Summer 2018 IATA Season  Winter 2017/2018 IATA 
Season  
 AFKL  Flybe  Combined  AFKL  Flybe  Combined  
Market 
share  [40-
50]% [50-
60]% [90-100]% [30-
40]% [60-
70]% [90-100]% 
Weekly 
frequencies  38 33 71 30 42 72 
 
(346)  Flybe and AFKL’s combined market shares post -Transaction on the Birmingham/ 
East Midlands –Amsterdam airport pair amount to [90-100]% in Summer 2018 
IATA Season and [90-100]% in Winter 2018 IATA Season.  
(347)  The majority of respondents to the market investigati on having expressed a view 
gave mixed replies as to whether there will be sufficient competition on the route to 
prevent the Parties’ from raising prices post -Transaction.282 
(348)  The Commission notes that the Flybe and AFKL were the only operators on the 
Birming ham-Amsterdam route in the past four IATA Seasons for which the Parties 
provided market share data and will thus post -Transaction become a monopoly 
route.283 The Commission thus considers that post -Transaction the merged entity is 
not constrained by competit ive pressure on this route.  
(349)  The market investigation has not allowed identifying any entry project on the 
Birmingham -Amsterdam route, which, in the absence of relevant commitments, 
could be considered as timely, likely and sufficient to deter or defeat th e 
anticompetitive effect of the Transaction on the route.  
(350)  As explained above  in Section 4.9 , if, absent the Transaction, Flybe would have 
exited this route, AFKL would likely have been more threatened by new entry on 
this route than in a post -Transaction scenario.  
(351)  Therefore, in the light of the above, the Commission considers that the Transaction 
raises serious doubts as to its compatibility with the internal market with respect to 
the Birmingham -Amsterdam route under any plausible market definition.  
5.1.1.5.4   Birmingham -Paris  
(352)  In the Summer 2018 IATA Season, [100,000 -200,000]  passengers travelled 
between Birmingham and Paris CDG  airports and [100,000 -200,000]  passengers in 
Winter 2017/2018 IATA Season.284 
                                                 
282  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to tr avel agents, question 15.  
283  Form CO, paragraph 462 and 457.  
284  Form CO, paragraphs 494.  
 
70 (353)  In Summer 2018 and Winter 2017/2018 IATA Seasons, both Flybe and AFKL 
operated direct services on the Birmingham -Paris CDG  airport pair. Flybe and 
AFKL did not operate on the East Midlands -Paris CDG  airport pair.  Neither Virgin 
Atlantic, Delta or Stobart Air operated on the Birmingham -Paris city pair.285  
(354)  The table be low provides the market shares and frequencies of AFKL and Flybe on 
the Birmingham -Paris CDG  airport pair.  
  Summer 2018 IATA Season  Winter 2017/2018 IATA 
Season  
 AFKL  Flybe  Combined  AFKL  Flybe  Combined  
Market 
share  [60-
70]% [20-
30]% [90-100]% [60-
70]% [30-
40]% [90-100]% 
Weekly 
frequencies  19 23 42 19 20 39 
 
(355)  Flybe and AFKL have a combined market shares post -Transaction on the 
Birmingham -Paris of around [90-100]% in the past four IATA Seasons irrespective 
of whether Birmingham and East Midlands airports or Paris CDG  and Paris Orly 
airports are considered substitutable. The only exception is the Summer 2017 
IATA Season when the combined market shares of AFKL and F lybe were around 
[70-80]% on the Birmingham/East Midlands -Paris CDG /Paris Orly airport pair and 
on the Birmingham -Paris CDG /Paris Orly airport pair. The Parties explained that 
this was due to the direct service that Vueling (IAG) operated for one season, t he 
Summer 2017 IATA Season, between Birmingham and Paris Orly airport. Since 
this service was only provided for one season, the Commission does not take the 
competitive pressure exerted by Vueling as an active competitor into account in the 
assessment but will assess the possibility of potential entry and potential 
competition.286  
(356)  The majority of respondents to the market investigation having expressed a view 
gave mixed replies as to whether there will be sufficient competition on the route to 
prevent the Pa rties’ from raising prices post -Transaction.287 
                                                 
285  Form CO, paragraphs 472, 478 and 487. The Parties submit that the DDS data shows minor bookings 
for Delta on this city pair on a marketing carrier basis. As explai ned above, the starting point for the 
Commission’s assessment of the Transaction is a market structure in which Virgin Atlantic is jointly 
controlled by AFKL, Delta and Virgin Group. Therefore, applying the most conservative approach, the 
Commission has in cluded those minor bookings for Delta on a marketing carrier basis in AFKL’s 
market share. However, taking those bookings into account in AFKL’s market share does not change 
to any material extent AFKL’s market share or market position.  
286  Form CO, paragra phs 478, 487 and 491. Concerning Paris Beauvais airport, the Parties stated that no 
bookings are recorded in the DDS data from either Birmingham or East Midlands airports to Paris 
Beauvais airport, see Form CO paragraph 473.  
287  See replies to eQ1 – Questi onnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
 
71 (357)  The Commission notes that the Flybe and AFKL were the only operators on the 
Birmingham -Paris route in the past IATA Seasons  and will thus post -Transaction 
become a monopoly route . The Commission thus considers that post -Transaction 
the merged entity is not constrained by competitive pressure on this route.  
(358)  Finally, the market investigation has not allowed identifying any entry project on 
the Birmingham -Paris route, which, in the absence of relevant commitments,  could 
be considered as timely, likely and sufficient to deter or defeat the anticompetitive 
effect of the Transaction on the route.  
(359)  As explained above in Section 4.9, i f, absent the Transaction, Flybe would have 
exited this route, AFKL would likely have been more threatened by new entry on 
this route than in a post -Transaction scenario.  
(360)  Therefore, in the light of the above, the Commission considers that the Transaction 
raises serious doubts as to its compatibility with the internal market with respect to 
the Birmingham -Paris route under any plausible market definition.  
5.1.1.5.5  Manchester -Paris  
(361)  In the Summer 2018 IATA Season, [200,000 -300,000]  passengers travelled 
between Manche ster and Paris Charles de Gaulle airports and [300,000 -400,000]  
passengers flew between Manchester/Liverpool John Lennon and Paris Charles de 
Gaulle airports. In Winter 2017/2018 IATA Season, [100,000 -200,000]  passengers 
travelled between Manchester and Pa ris Charles de Gaulle airports and [200,000 -
300,000]  passengers flew between Manchester/Liverpool John Lennon and Paris 
Charles de Gaulle airports.288  
(362)  In both seasons, Flybe and AFKL operated direct services on the MAN -CDG 
airport pair.289 Neither Virgin Atla ntic, Delta or Stobart Air operated on the 
Manchester -Paris city pair.290  
(363)  easyJet operates direct flights on the Manchester -Paris Charles de Gaulle airport 
pair as well as on the Liverpool John Lennon -Paris Charles de Gaulle airport pair, 
whereas neither Flybe nor AFKL operates on the Liverpool John Lennon -Paris 
Charles de Gaulle airport pair.291  
                                                 
288  Form CO, paragraphs 509 and 513.  
289  Form CO, paragraph 505.  
290  Form CO, paragraph 505. The Parties submit th at the DDS data shows minor bookings for Delta and 
Virgin on this city pair on a marketing carrier basis. As explained above, the starting point for the 
Commission’s assessment of the Transaction is a market structure in which Virgin Atlantic is jointly 
controlled by AFKL, Delta and Virgin Group. Therefore, applying the most conservative approach, the 
Commission has included those minor bookings for Delta on a marketing carrier basis in AFKL’s 
market share. However, taking those bookings into account in AFK L’s market share does not change 
to any material extent AFKL’s market share or market position.  
291  Form CO, paragraphs 505 et seq . 
 
72 (364)  The table below provides the market shares and frequencies of AFKL and Flybe on 
the Manchester -Paris Charles de Gaulle airport pair.292  
  Summer 2018 IATA Season  
 Winter 2017/2018 IATA Season  
 
 AFKL  Flybe  Combined  easyJet  AFKL  Flybe  Combined  easyJet  
Market 
share  [50-60]% [10-
20]% [60-70]% [30-
40]% [40-
50]% [20-
30]% [70-80]% [20-
30]% 
Weekly 
frequencies  21 28 49 9 21 26 46 8 
 
(365)  The table below provides the market shares and frequencies of AFKL and Flybe on 
the Manchester/Liverpool John Lennon -Paris Charles de Gaulle airport pair.293  
 Summer 2018 IATA Season  
 Winter 2017/2018 IATA Season  
 
 AFKL  Flybe  Combined  easyJet  AFKL  Flybe  Combined  easyJet  
Market share  [40-
50]% [10-
20]% [50-60]% [40-
50]% [40-
50]% [10-
20]% [60-70]% [30-
40]% 
Weekly 
frequencies  21 28 49 15 21 26 46 12 
 
(366)  As stated above  in Section 4.1.4 , the market investigation gave mixed replies as to 
whether Manchester and Liverpool John Lennon airport can be considered 
substitutable. Around half of the respondents to the market investigation having 
expressed a view explained that they consider the tw o airports to be substitutable 
for passengers.  
(367)  If Manchester and Liverpool John Lennon airport are considered substitutable, the 
Parties will face significant competition from easyJet post -Transaction . easyJet  had 
a market share of [40-50]% in Summer 2018  IATA Season and [30-40]% in Winter 
207/2018 IATA Season. The Commission therefore considers that the competitive 
constraints on the Parties on the Manchester/ Liverpool John Lennon – Paris 
Charles de Gaulle airport pair would be sufficient to prevent them  from raising 
prices post -Transaction on this route.  
(368)  The Parties would also face significant competitive constraints  if Manchester and 
Liverpool John Lennon airport are not considered substitutable . First, easyJet 
                                                 
292  Form CO, paragraph 509.  
293  Form CO, paragraph 513.  
 
73 provides a significant constraint. In Sum mer 2018 IATA Season, easyJet accounted 
for a [30-40]% and in Winter 2017/2018 for [20-30]% of the market. Second, the 
majority of respondents to the market investigation having expressed a view 
considers that there will be sufficient competition on the ro ute to prevent the 
Parties’ from raising prices post -Transaction.294 Third, the Commission take s into 
account the fact that for a large number of passengers, the two airports are 
substitutable. As a result, the competitive pressure exerted by EasyJet on the 
Liverpool John Lennon -Paris Charles de Gaulle airport pair constitutes an out -of-
market constraint on the Parties and mitigates the Parties’ market position post -
Transaction on the Manchester -Paris Charles de Gaulle airport pair.  
(369)  Therefore, taking all con siderations into account, the Commission considers that 
the Parties will face significant competition from easyJet post -Transaction also on 
the Manchester -Paris Charles de Gaulle airport pair. The Commission therefore 
concludes  that the competitive constra ints on the Parties on the Manchester – Paris 
Charles de Gaulle airport pair would be sufficient to prevent them from raising 
prices post -Transaction on this route.  
(370)  In the light of the above, the Commission considers that the Transaction does not 
raise ser ious doubts as to its compatibility with the internal market with respect to 
the Manchester -Paris route under any plausible market definition .  
5.1.1.5.6  Edinburgh -Paris  
(371)  In the Summer 2018 IATA Season, [200,000 -300,000]  passengers travelled 
between Edinburgh and Paris Charles de Gaulle airports and [200,000 -300,000]  
passengers flew between Edinburgh and Paris Charles de Gaulle/ Paris Orly 
airports. In Winter 2017/2018 IATA Season, [100,000 -200,000]  passengers 
travelled b etween Edinburgh and Paris Charles de Gaulle airports and [100,000 -
200,000]  passengers flew between Edinburgh and Paris Charles de Gaulle/ Paris 
Orly airports.295 
(372)  AFKL and Flybe overlap on the Edinburgh -Paris Charles de Gaulle airport pair due 
to a […] codeshare agreement. Flybe does not operate this airport pair directly with 
its own metal. During the Summer 2018 IATA Season, Flybe marketed bookings 
on 3 direct services each day. AFKL operated direct flights on the EDI -CDG 
airport pair as well as the E DI-ORY airport pair. As already explained above in 
Section 5.1.1.3 , under the terms of this […] codeshare agreement, […] bears a 
commercial risk.296 The Commission will therefore apply the most conservative 
approach and assess the Edinburgh -Paris Charles de Gaulle route as an operating 
overlap route because of the commercial risk […]. Neither Virgin Atlantic, Delta or 
Stobart Air operated on the Edinburgh -Paris city pair.297 
                                                 
294  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
295  Form CO, paragraphs 521 and 524.  
296  Form CO, paragraph 533 and footnote 265.  
297  Form CO, paragraph 517. The Parties submit that the DDS data shows m inor bookings for Delta on 
this city pair on a marketing carrier basis. As explained above, the starting point for the Commission’s 
 
 
74 (373)  The table below provides the market shares and frequencies of AFKL and Flybe as 
well as  its biggest competitor easyJet on the Edinburgh -Paris Charles de Gaulle 
airport pair.  
 Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 AFKL  Flybe  Combined  easyJet  AFKL  Flybe  Combined  easyJet  
Market share  [40-
50]% [5-
10]% [50-60]% [40-
50]% [30-
40]% [0-
5]% [30-40]% [60-
70]% 
Weekly 
frequencies  21 2 23 12 20 0 20 11 
 
(374)  The table below provides the market shares and frequencies on the Edinburgh -Paris 
Charles de Gaulle/Paris Orly airport pair.  
 Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 AFKL  Flybe  Combined  easyJet  AFKL  Flybe  Combined  easyJet  
Market share  [50-
60]% [0-
5]% [50-60]% [40-
50]% [40-
50]% [0-
5]% [40-50]% [50-
60]% 
Weekly 
frequencies  24 2 26 12 22 0 22 11 
  
(375)  easyJet is a low -cost point -to-point airline domiciled in the United Kingdom that 
operates in the European short -haul aviation market and is focused primarily on 
Western and Northern Europe. Between August 2016 and August 2017, easyJet 
carried more than 79 million passengers and had, in 2017,  a fleet of 279 aircraft.298 
(376)  On both airport pairs, the Parties will face significant competition from easyJet 
post-Transaction. Moreover, the majority of respondents to the market 
investigation having expressed a view considers that there will be sufficient  
competition on the route to prevent the Parties’ from raising prices post -
Transaction.299  
                                                                                                                                                 
assessment of the Transaction is a market structure in which Virgin Atlantic is jointly controlled by 
AFKL, Delta and Virgin  Group. Therefore, applying the most conservative approach, the Commission 
has included those minor bookings for Delta on a marketing carrier basis in AFKL’s market share. 
However, taking those bookings into account in AFKL’s market share does not change t o any material 
extent AFKL’s market share or market position.  
298  See e.g. Case M.8672 – easyJet/Certain Air Berlin  assets, paragraphs 2 et seq.  
299  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, que stion 14 and eQ3 – Questionnaire to travel agents, question 15.  
 
75 (377)  The Commission therefore considers that the competitive constraints on the Parties 
would be sufficient to prevent them from raising prices post -Transaction on the 
Edinburgh -Paris route.  
(378)  In the light of the above, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market with respect to 
the Edinburgh -Paris route under any plausible market definition .  
5.1.1.6  Direct -indirect operating overlaps  
5.1.1.6.1  “Filters ”  
(379)  Should direct and indirect routes be considered substitutable, c onsistent with 
previous Commission practice, the Parties have applied the following filters for 
direct/indirect overlap routes to exclude likely unproblematic routes from the scope 
of its investigation (all criteria must have been met in the four last completed IATA 
Seasons):300 
 The Parties’ combined market share was below 25%; or  
 One of the Parties had a market share below 2%; or  
 Short -haul routes w here the total share of indirect operations in the 
relevant market was below 10%; or  
 At least one end of the city pair is outside the EU and the total annual 
traffic was below 30 000 passengers; or  
 The route was below the HHI thresholds of paragraph 20 o f the Horizontal 
Merger Guidelines.  
(380)  As a result of the above, the Parties submitted that 22 direct/indirect operating 
overlap routes would be affected by the Transaction  if direct and indirect routes are 
considered substitutable .301  
5.1.1.6.2  Closeness of competition  
(381)  As explained above in the market definition section in Section 4.1.3, the 
Commission considered in previous cases  that the substitutability between direct 
and indirect flights on a route -by-route basis depends on various factors, including 
notably the fli ght duration, but also price considerations or the inconvenience 
associated with the indirect flight. In particular, with regard to short -haul routes 
(generally below 6 hours flight duration) it was considered that indirect flights do 
                                                 
300  See e.g. Cases M.7541 – IAG/Aer Lingus , paragraphs 151 et seq . and M.7333 – Alitalia/Etihad , 
paragraphs 171 et seq . 
301  While the Parties submitted in the Form CO that the Transaction would give rise to 31 affected 
direct/indirect operating overlap routes, they explained at a later stage that 9 of those 31 routes were 
not direct/indirect operating overlaps in Winter 2017/2018 and Summer 2018 seasons, see Form CO, 
paragraph 538 and reply to RF I 5 of 24 May 2019. These are the following routes: […]. These routes 
will therefore not be assessed as direct/indirect operating overlap routes in this decision.  
 
76 not generally provide  a competitive constraint to direct flights absent exceptional 
circumstances, for example, the direct connection does not allow for a one -day 
return trip or the share of indirect flights in the overall market is significant.302  
(382)  The Parties submit that, shou ld direct and indirect flights be considered 
substitutable, the Transaction gives rise to 22 affected direct/indirect overlap 
routes.303  
(383)  On 10 of those 22 routes, the share of indirect flights in both seasons is significant, 
i.e. higher than [10-20]%.304 On 2 0 of the 22 direct/indirect overlap routes, the 
direct flight does not allow for a one -day return trip.  
(384)  Therefore, the Commission considered in Section 4.1.3 above that the exception al 
circumstances to consider direct and indirect flights as substitutable  seem to apply 
and t hat 22 overlap routes would be affected by the Transaction.  
(385)  However, for the reasons explained in the following, the Commission considers 
that AFKL and Flybe are not close competitors on the se 22 overlap routes .  
(386)  The Commission has in previous airline cases analysed the closeness of 
competition between the Parties to the concentration.305 The concept of “closeness 
of competition ” may play an important role in better understanding the competitive 
constraint exerted by different competitors  on each other in differentiated markets 
such as airline markets.306 
(387)  The Commission notes that on all 22 affected  direct/indirect overlap routes, Flybe 
is operating the direct flight while AFKL is operating the indirect flight. The only 
exception is the Inve rness -Amsterdam route, on which AFKL is operating the 
direct flight and Flybe the indirect flight. [confidential strategic information on 
                                                 
302  See e.g. Cases M. 8361 – Qatar Airways/Alisarda/Meridiana , paragraph 25; M. 7541 – IAG/Ae r 
Lingus , paragraph 32; M.7333 – Alitalia/Etihad , paragraph 77; M.6663 – Ryanair/Aer Lingus III , 
paragraph 375.  
303  These are the following routes: BER -BHX, BER -CWL, BES -BHX, BHX -HAJ, BHX -HAM, BHX -
MIL, BHX -NTE, BHX -STR, BHX -TLS, BUD -HUY, CWL -DUS, CWL -GVA, C WL-MUC, CWL -
ROM, CWL -VCE, GVA -SOU, HAJ -MAN, HUY -VCE, INV -AMS, LUX -MAN, LYS -SOU, MAN -
TLS.  
304  See Cases M.2672 – SAS/Spanair , paragraph 15 and M.3280 – Air France/KLM , paragraph 80. See 
also e.g. Cases M.7541 – IAG/Aer Lingus , paragraphs 151 et seq . and M.7333 – Alitalia/Etihad , 
paragraphs 171 et seq ., for the filters applied by the Commission for direct/indirect overlap routes to 
exclude likely unproblematic routes from the scope of its investigation, for example short -haul routes 
where the total s hare of indirect operations in the relevant market was below 10%.  
305  See e.g. Cases M.7541 – IAG/Aer Lingus , paragraphs 155 et seq.;  M.6828 – Delta Air Lines/Virgin 
Group/Virgin Atlantic Limited , paragraphs 168 et seq . 
306  See paragraphs 28 -30 of the Horiz ontal Merger Guidelines.  
 
77 Flybe’s and AFKL’s monitoring practices ].307 [confidential strategic information 
on Flybe’s and AFKL’s monitoring practices ].308  
(388)  In addition, the majority of competing airlines flying direct services on the 
direct/indirect overlap routes stated that they would not monitor competitors flying 
indirect services.309 Furthermore, the Commission has requested from AFKL and 
Flybe the average fares for direct as well as indirect flights in Summer 2018 and 
Winter 2017/2018 IATA Season on the 22 direct/indirect affected overlap 
routes.310 For each of these direct/indirect overlap routes, the fare for the indirect 
route, despite being  longer and involving a stop -over, was higher than the fare for 
the direct flight. This indicates that from the supply -side perspective of Flybe and 
AFKL as well as the other competing airlines , indirect flights exert only a limited 
constraint – if any – on the direct flights on the direct/indirect operating overlap 
routes affected by the Transaction.  
(389)  When asked if they consider indirect flights as an alternative to direct flights with 
regard to the direct/indirect overlaps affected by the Transaction, onl y a minority of 
respondents to the market investigation confirmed this, while around half of the 
respondents that expressed an opinion replied that indirect flights would not be 
considered as an alternative to direct flights.311 Other respondents replied tha t in 
general this would depend on other criteria, for example the price or the total flight 
duration.312  
(390)  From a demand -side perspective, while the majority of travel agents having 
expressed their views stated that, on each of the affected direct/indirect ov erlap 
routes, they sell tickets to both direct and indirect flights to their customers;313 the 
majority of corporate customers having expressed their view stated that they only 
buy tickets for direct flights.314  
(391)  When asked which criteria would make customers choose an indirect flight over a 
direct flight, respondents to the Commission’s market investigation identified most 
                                                 
307  See reply to RFI 5 of 24 May 2019.  
308  See reply to RFI 5 of 24 May 2019.  
309  Reply to eQ1 – Questionnaire to airlines, question 7.  
310 See reply to RFI 5 of 24 May 2019.  
311  See replies to eQ1 – Questionnaire to airlines, question 5; eQ2 – Questionnaire to corporate customers, 
question 2 and eQ3 – Questionnaire to travel agents, question 3.  
312  See replies to eQ1 – Questionnaire to airlines, question 5; eQ2 – Questionnaire to corporate customers, 
question 2 and eQ3 – Questionnaire to  travel agents, question 3.  
313  See replies to eQ3 – Questionnaire to travel agents, question 5.  
314  See replies to eQ3 – Questionnaire to corporate customers, question 4.  
 
78 frequently price difference and total travel duration (including stopover time), 
followed by schedules.315  
(392)  One travel agency responding to the market investigation stated that “[c]ustomers 
usually do not do stopovers for flights under 3 hours, but in some cases could 
consider if they travel for leisure and price is significantly cheaper .”316  
(393)  With regard to the p rice difference, as already explained above , the average fare for 
the indirect flight in Summer 2018 and Winter 2017/2018 IATA Season with 
AFKL (and Flybe, respectively, concerning the Amsterdam -Inverness route) on the 
direct/indirect overlap routes was hi gher than the fare for the direct flight with 
Flybe (and AFKL, respectively).317 
(394)  Concerning the total travel duration, the Commission notes that of the 22 
direct/indirect overlap routes, 18 routes have a flight duration of the direct flight of 
under or aroun d 2 hours, while 4 routes have a flight duration of the direct flight of 
between 2 and 3 hours.318 The indirect flight duration was at least (with the 
quickest direct connection) more than 80 minutes longer than the direct flight 
duration on 19 of the direct /indirect overlap routes ; on 8 of those routes, it was at 
least more than 110 minutes longer than the direct flight duration .319  
(395)  The Commission considers that , taking into account the short direct flight time of 
the direct/indirect overlap routes of 2 -3 hou rs, the total travel duration of the 
indirect routes is on most routes significantly longer than the direct total travel 
time.  
(396)  The market investigation showed that one of the criteria that would make 
customers choose an indirect flight over a direct fligh t is the schedules of the 
flights.320  
(397)  When assessing the exceptional criteria,  the Commission has analysed  if a one -day 
return trip is possible with the direct flight  and found that o n 20 of the 22 
direct/indirect overlap routes, the direct flight does not allow for a one -day return 
trip.  
(398)  On the 20 routes on which the direct flight does not allow for a day -return trip, the 
indirect flight allows for a one -day return trip in both seaso ns and both directions 
                                                 
315  See replies to eQ1 – Questionnaire to airlines, question 6; eQ2 – Questionnaire to corporate customers, 
question 3 and eQ3 – Questionnaire to travel agents, question 4.  
316  See replies to eQ3 – Questionnaire to travel agents, question 3.  
317  See reply to RFI 5 of 24 May 2019.  
318  See reply to QP1 of 19 March 2019, question 16.  
319  See als o Case M.5335 - Lufthansa/SN Holding (Brussels Airlines) , paragraph 40.  
320  See replies to eQ1 – Questionnaire to airlines, question 6; eQ2 – Questionnaire to corporate customers, 
question 3 and eQ3 – Questionnaire to travel agents, question 4.  
 
79 on only 3 routes and it is only possible to do a one -day return trip in one season 
and/ or in one direction on 10 routes.  
(399)  Furthermore, even on routes and directions on which a one -day return trip by using 
an indirect connection woul d be possible, this would involve a very long travel day 
with a very short stay in the city. For example on the Birmingham -Nantes route, in 
the Nantes -Birmingham direction, the amount of time in Birmingham before the 
return flight is below three hours, mak ing a day -return trip in this direction 
realistically not possible. In the Birmingham -Nantes direction, the amount of time 
in Nantes city centre would be at most around four hours with an overall travel 
time between departure at Birmingham airport and arri ving at Birmingham airport 
of around 15 ½ hours (not taking into account the travel time from/to the airport in 
Birmingham, time for check -in in the morning and disembarking the plane and 
waiting for hold luggage in the evening). AFKL’s data indicates that  between April 
2018 and March 2019 it had on average [0-5] return passengers per day on the 
Birmingham -Nantes route, of which only [0-5] took a same day return.321  
(400)  The Commission considers that, even on routes where a one -day trip might be 
possible with the  indirect service while it is not possible with the direct service, this 
is unlikely to be an attractive or workable option. The Commission therefore 
considers that this indicates that indirect flights are not closely competing with 
direct flights  on the 2 2 affected overlap routes . 
(401)  Taking the above considerations into account, the Commission considers that 
AFKL and Flybe are not close competitors  on the 22 affected overlap routes .  
5.1.1.6.3  Overview of the 22 direct/indirect overlap routes  
(402)  As explained in the previo us section, considering that AFKL and Flybe are not 
close competitors, it is not evident that direct and indirect flights are substitutable 
on the 22 direct/indirect overlap routes. However, no serious doubts arise for one of 
the following reasons: the rou te was exited by Flybe prior to and unrelated to the 
Transaction; the routes has very low passenger numbers; the increment brought 
about by the Transaction is de minimis ; or a competitor is active on the route 
sufficiently constraining the Parties post -Transaction.  
(403)  An overview of the main reason why no serious doubts arise on each of 22 routes is 
provided in the following table:  
 
 
 
 
 
                                                 
321  See reply  to RFI 5 of 24 May 2019 and supplementary response of the Parties of 7 June 2019.  
 
80  Route exited 
prior to and 
unrelated to 
Transaction  Route with 
very low 
passenger 
number  Low increment 
brought about 
by the  
Transaction  Competitor 
sufficiently 
constraining 
Connect 
Airways post -
Transaction  
Berlin -Cardiff  x    
Birmingham -
Toulouse  x    
Cardiff -
Duesseldorf  x    
Cardiff -Munich  x    
Cardiff -Rome  x    
Cardiff -Venice  x    
Brest -
Birmingham   x   
Birmingham -
Nantes   x   
Budapest -
Humberside   x   
Cardiff -Geneva   x   
Southampton -
Geneva   x   
Humberside -
Venice   x   
Luxembourg -
Manchester   x   
Lyon -
Southampton   x   
Inverness -
Amsterdam    x  
Berlin -
Birmingham    x  
Birmingham -
Hanover    x  
 
81  Route exited 
prior to and 
unrelated to 
Transaction  Route with 
very low 
passenger 
number  Low increment 
brought about 
by the  
Transaction  Competitor 
sufficiently 
constraining 
Connect 
Airways post -
Transaction  
Birmingham -
Milan    x  
Birmingham -
Stuttgart    x  
Birmingham -
Hamburg     x 
Hanover -
Manchester     x 
Manchester -
Toulouse     x 
  
5.1.1.6.4   Routes exited by Flybe prior to and unrelated to the Transaction  
(404)  The Transaction does not have any merger specific effect on competition on the 
Berlin -Cardiff, Birmingham -Toulouse, Cardiff -Duesseldorf, Cardiff -Munich, 
Cardiff -Rome and Cardiff -Venice routes.  
(405)  Flybe exited the Birmingham -Toulouse route in March 2018 and t he Cardiff -
Duesseldorf route in October 2018.322 
(406)  Concerning the Cardiff -Berlin, Cardiff -Munich, Cardiff -Rome and Cardiff -Venice 
routes , the Parties have explained that the routes all fall within the scope of Flybe's 
[confidential information about  Flybe ’s commercial agreement s and the reasons for 
Flybe exiting certain routes ]. Flybe’s schedule for the Winter 2019/20 20 IATA 
Season excludes all routes to/from Cardiff airport.323  
(407)  The Commission considers therefore that Flybe exited these six routes pre -
Transactio n or Flybe decided to exit pre -Transaction and unrelated to the 
Transaction.324 
                                                 
322  See reply to RFI 5 of 24 May 2019.  
323  Reply to RFI 5 of 24 May 2019 and reply to RFI 6 of 29 May 2019.  
324  Form Co, paragraph 541,reply to RFI 5 of 24 May 2019 and reply t o RFI 6 of 29 May 2019.  
 
82 5.1.1.6.5  Routes with very low passenger numbers  
(408)  The Commission has considered, in its previous decision practice, when passenger 
figures where very low, that these  direct/indirect overla p routes are not constituting 
a substantial part of the internal market or that no competition concerns were 
deemed to arise.325  
(409)  Applying a similar reasoning, the Commission considers that no competition 
concerns are deemed to arise on the following routes.   
Route – city pair  Total annual pax 
(Summer 2018 IATA 
Season and Winter 
2017/2018 IATA Season)  
Brest -Birmingham326 [0-5,000]  
Birmingham -Nantes327 [15,000 -20,000]  
Budapest -Humberside  [0-5,000]  
Cardiff -Geneva  [0-5,000]  
Southampton -Geneva  [20,000 -25,000]  
Humberside -Venice  [0-5,000]  
Luxembourg -
Manchester328 [25,000 -30,000]  
Lyon -Southampton329 [0-5,000]  
 
                                                 
325 See e.g. Cases M. 7333 – Alitalia /Etihad , paragraph 299; M. 6607 – US Airways/American Airlines , 
paragraph 32. See also Case M.3280 – Air France/KLM , paragraph 83.  
326  Numbers do not differ irrespective of whether BHX and EMA ar e considered substitutable or not.  
327  Numbers do not differ materially irrespective of whether BHX and EMA are considered substitutable 
or not. To apply a cautious approach, the annual pax numbers included in the table include passengers 
from BHX and EMA a irports.  
328  Numbers do not differ materially irrespective of whether MAN, LPL and LBA airports are considered 
substitutable or not. To apply a cautious approach, the annual pax numbers included in the table 
include passengers from MAN, LPL and LBA airports.  
329  The Parties submitted that Flybe’s direct operations on this route ended in February 2018, while ad -
hoc operations were conducted in December 2018 to January 2019, see response to RFI 5 of 24 May 
2019. It can be left open if Flybe exited route . Applying a cautious approach and considering that 
Flybe is still operating, the passenger numbers on this route are very low and the route is therefore in 
any case not considered to be substantial part of the internal market.  
 
83 5.1.1.6.6  Low increment brought about by the Transaction or sufficient competition on 
the route  
(410)  In previous cases, the Commission has considered increments of around 5% as low 
increments on direct/indirect overlap routes.330 In line with its prior decisional 
practice, the Commission considers that an increment of around 5% on an affected 
direct/indirect overlap is de minimis  and that the following routes do not give rise  
to serious doubts as to the compatibility of the Transaction with the internal 
market.  
                                      Summer Season                              Winter Season  
Route (city –
pair)  Airport 
pair  Total 
pax 
summer  Flybe 
market 
share  AFKL331 combined  Total 
pax 
winter  Flybe 
market 
share  AFKL332  combined  
Inverness -
Amsterdam  INV-
AMS  [30,000 -
40,000]  [1-
5]% [90-
100]% [90-
100]% [0-
10,000]  [1-
5]% [90-
100]% [90-
100]% 
Berlin -
Birmingham  TXL -
BHX333  [30,000 -
40,000]  [70-
80]% [5-10]% [80-90]% [30,000 -
40,000]  [80-
90]% [1-5]% [80-90]% 
Birmingham -
Hannover  BHX -
HAJ334 [20,000 -
30,000]  [80-
90]% [1-5]% [90-
100]% [10,000 -
20,000]  [80-
90]% [5-10]% [90-
100]% 
Birmingham -
Milan  BHX -
MXP335 [30,000 -
40,000]  [70-
80]% [1-5]% [70-80]% [20,000 -
30,000]  [60-
70]% [1-5]% [60-70]% 
Birmingham -
Stuttgart  BHX -
STR336 [40,000 -
50,000]  [80-
90]% [1-5]% [90-
100]% [20,000 -
30,000]  [80-
90]% [1-5]% [90-
100]% 
 
                                                 
330  See e.g. Cases M. 8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic , paragraph 198; 
M.7541 – IAG/Aer Lingus , paragraphs 412 et seq .  
331  AFKL’s market share includes the market share of Delta and Virgin Airlines, where applicable.  
332  AFKL’s market share includes the market  share of Delta and Virgin Airlines, where applicable.  
333  The Commission is applying a cautious and conservative approach with regard to the Berlin -
Birmingham route and included in the table the narrowest plausible market comprising of the Berlin 
Tegel -Birmingham airport pair on which the combined market share post -Transaction and the 
increment is highest.  
334  The market shares of the Parties do not differ, irrespective of whether BHX -HAJ or BHX/EMA -HAJ 
are considered.  
335 The Commission is applying a cautio us and conservative approach with regard to the Birmingham -
Milan route and included in the table the narrowest plausible market comprising of Birmingham -MXP 
airport pair on which the combined market share post -Transaction and the increment is highest.  
336  The market shares of the Parties do not differ, irrespective of whether BHX -STR or BHX/EMA -STR 
are considered.  
 
84 (411)  On the routes  briefly assessed in the following par agraphs , the increment brought 
about by the Transaction, while not being a de minimis  increment, is lower than 
10% and another airline is active on the route, constraining the merged entity post -
Transaction: Birmingham -Hamburg, Hannover -Manchester and Manchester -
Toulouse.  
(412)  On the Birmingham -Hamburg route , in the Summer 2018 IATA Sea son, 
[20,000 -30,000]  passengers travelled on this route. In Winter 2017/2018 IATA 
Season, [10,000 -20,000]  passengers travelled between Birmingham and Hamburg. 
The table below provides the market shares of the AFKL and Flybe on the 
Birmingham -Hamburg  airport pair.337 
Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
Flybe 
market 
share  AFKL 
market 
share  combined  Flybe market 
share  AFKL 
market 
share  combined  
[70-
80]% [5-
10]% [70-80]% [70-80]% [5-
10]% [70-80]% 
 
(413)  Lufthansa is also active  on this route , a competitor with a strong presence in 
Germany and with a market share of [10-20]% in Summer 2018 IATA Season and 
[10-20]% in Winter 2017/2018 IATA season, which is higher than the increment 
brought about by the Transaction. In addition, th e majority of respondents to the 
market investigation having expressed a view considers that there will be sufficient 
competition on the route to prevent the Parties from raising prices post -
Transaction.338 On this basis, the Commission considers that the co mpetitive 
constraints on the Parties on the Birmingham -Hamburg route would be sufficient to 
prevent them from raising prices post -Transaction on this route.  
(414)  On the Hanover -Manchester route , in the Summer 2018 IATA Season, [20,000 -
30,000]  passengers travel led on this route. In Winter 2017/2018 IATA Season, 
[10,000 -20,000]  passengers travelled between Hannover and Manchester. While 
AFKL and Flybe’s combined market shares do not differ significantly irrespective 
of whether M anchester , Liverpool John Lennon an d Leeds Bradford  airport are 
considered substitutable or not, the increment brought about by the Transaction is 
highest if M anchester and Leeds Bradford  are considered substitutable. The 
Commission is applying a cautious approach and is therefore assessing  the 
competitive effects of the Transaction on the Hanover -Manchester/Leeds Bradford  
airport pair. The table below provides the market shares of the Flybe and AFKL on 
the Hanover -Manchester/Leeds Bradford  airport pair.  
                                                 
337  Market shares do not differ, irrespective of whether BHX -HAM or BHX/EMA -HAM are considered.  
338  See replies to eQ1 – Questionnaire to airlines , question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
 
85 Summer 2018 IATA Season  Winter 2017/ 2018 IATA Season  
Flybe 
market 
share  AFKL 
market 
share  combined  Flybe market 
share  AFKL 
market 
share  combined  
[80-
90]% [5-
10]% [80-90]% [70-80]% [5-
10]% [80-90]% 
 
(415)  Lufthansa is also active on th is route. Lufthansa has a strong presence in Germany 
and has a market share of [10-20]% in Summer 2018 IATA Season and [10-20]% 
in Winter 2017/2018 IATA season, which is higher than the increment brought 
about by the Transaction. In addition, the majority of  respondents to the market 
investigation having expressed a view considers that there will be sufficient 
competition on the route to prevent the Parties from raising prices post -
Transaction.339 On this basis, the Commission considers that the competitive 
constraints on the Parties on the Hanover -Manchester route would be sufficient to 
prevent them from raising prices post -Transaction on this route.  
(416)  On the Manchester -Toulouse route , in the Summer 2018 IATA Season, [30,000 -
40,000]  passengers travelled on this route. In Winter 2017/2018 IATA Season, 
[20,000 -30,000]  passengers travelled between Manchester and Toulouse. While the 
AFKL and Flybe’s  combined market shares do not differ significantly irrespective 
of whether Manchester, Li verpool John Lennon and Leeds Bradford airport are 
considered substitutable or not, the increment brought about by the Transaction is 
highest if Manchester and Leeds Bradford  are considered substitutable. Th e 
Commission is applying a cautious approach and is therefore assessing the 
competitive effects of the Transaction on the Toulouse -Manchester/Leeds Bradford  
airport pair. The table below provides the market shares of the AFKL and Flybe on 
the Toulouse -Manchester/Leeds Bradford  airport pair.  
 Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
Flybe 
market 
share  AFKL 
market 
share  combined  Flybe market 
share  AFKL 
market 
share  combined  
[70-
80]% [5-
10]% [80-90]% [60-70]% [5-
10]% [70-80]% 
 
(417)  On the route also TUI, Lufthansa and British Airways are active. In the Winter 
2017/2018 IATA Season, TUI had a market share of [20-30]%, Lufthansa of [5-
10]% and British Airways of [0-5]%. In the Summer 2018 IATA Season, 
Lufthansa had a market share of [5-10]%, British Airways of [0-5]% and TUI [0-
                                                 
339  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
 
86 5]%. In both seasons, the market share of the biggest competitor is higher or 
similar to the increment brought about by the Transaction. In addition, the majority 
of respondents to the market investigation having  expressed a view considers that 
there will be sufficient competition on the route to prevent the Parties from raising 
prices post -Transaction.340 On this basis, the Commission considers that the 
competitive constraints on the Parties on the Manchester -Toulo use route would be 
sufficient to prevent them from raising prices post -Transaction on this route.  
5.1.1.6.7  Conclusion  
(418)  In the light of the above, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal m arket on any of the 
direct -indirect overlap routes.  
5.1.1.7  Indirect/indirect overlaps  
(419)  The Parties submitted that 6 indirect/indirect operating overlap routes would be 
affected by the Transaction  where Flybe and AFKL both operate only indirect 
flights :341 Bordeaux -Manchester, Cagliari -Manchester, Duesseldorf -Edinburgh, 
Edinburgh -Nantes, Edinburgh -Toulouse and Glasgow -Munich.  
(420)  The Glasgow -Munich route has not been an overlap route in the last two IATA 
Seasons.342 This route will therefore not be assessed as an indirect/ indirect 
operating overlap route in this decision.  
(421)  According to the data submitted by the Parties, the Cagliari -Manchester route was 
only an overlap in Winter 2017/2018 IATA Season and only on the Cagliari -
Manchester/Liverpool John Lennon airport pair. In  Winter 2017/2018, a total of [0-
500] passengers was transported on this route. The Commission will therefore not 
assess this route any further in the following paragraphs.  
(422)  As regards airport substitutability, for the purpose of this decision, the Commiss ion 
has taken a cautious approach and assessed the effects of the Transaction on the 
airport pair on which the combined market shares or the increment brought about 
by the Transaction are highest.  
(423)  The table below provides the market shares of Flybe and AF KL on the 
indirect/indirect overlap routes.  
                                                 
340  See replies to eQ1 – Questionnaire to airlines, question 18; eQ2 – Questionnaire to corporate 
customers, question 14 and eQ3 – Questionnaire to travel agents, question 15.  
341  Consistent with previous Commissi on practice, the Parties have applied the following filters for 
indirect/indirect overlap routes to exclude likely unproblematic routes from the scope of its 
investigation (all criteria must have been met in the four last completed IATA Seasons): The Parti es’ 
combined market share was below 25%; or  one of the Parties had a market share below 2%; or as 
regards short -haul routes where the total annual traffic was below 15 000 passengers or as regards 
long-haul routes where the total annual traffic was below 3 0 000 passengers; or at least one end of the 
city pair is outside the EU and the total annual traffic was below 30 000 passengers; or the route was 
below the HHI thresholds of paragraph 20 of the Horizontal Merger Guidelines.  
342  Form CO, paragraph 545.  
 
87  Summer 2018 IATA Season  Winter 2017/2018 IATA 
Season  
 Flybe  AFKL  combined  Flybe  AFKL  combined  
Bordeaux -
Manchester 
(BOD -
MAN/LPL)  [0-5]% [50-
60]% [60-70]% [0-5]% [60-
70]% [70-80]% 
Duesseldorf -
Edinburgh 
(DUS -EDI)  [10-
20]% [5-10]% [10-20]% [10-
20]% [5-10]% [20-30]% 
Edinburgh -
Nantes 
(EDI -NTS)  [0-5]% [5-10]% [10-20]% [0-5]% [0-5]% [5-10]% 
Edinburgh -
Toulouse 
(EDI -TLS)  [0-5]% [5-10]% [5-10]% [0-5]% [5-10]% [5-10]% 
 
(424)  The Commission notes that two of the indirect/indirect overlaps routes (Edinburgh -
Nantes and Edinburgh -Toulouse) did not constitute an affected market in the last 
two IATA Seasons.  
(425)  On the other two routes, no competition concerns arise because either the Parties’ 
combined market shares are below 30% (Duesseldorf -Edinburgh) or the increment 
brought about by the Transaction is below 5% (Bordeaux -Manchester), so that no 
material merger specific effect would likely exist. Indirect routes are often 
established in an opportunistic way by carriers and are modified from one IATA 
Season to the next. Furthermore, price increases or reductions of capacity could be 
countered by competitors who could start operating these routes more easily than 
on direct/direct routes,  which require the deployment of aircraft dedicated to the 
O&D route. Given the low competitive constraint between indirect services, market 
shares below 60% on routes indicate that there is already prima facie  sufficient 
competition from other carriers.343  
(426)  No respondent to the market investigation raised substantiated concerns as to the 
existence of any competition problem on the indirect -indirect overlap routes.344 
(427)  In the light of the above, the Commission considers that the Transaction does not 
raise seriou s doubts as to its compatibility with the internal market on any of the 
indirect -indirect overlap routes.  
                                                 
343  See e.g. Case M.7541 – IAG/Aer Lingus , paragraph 431.  
344  See replies to eQ1 – Questionnaire to airlines, question 66; eQ2 – Questionnaire to corporate 
customers, question 17 and eQ3 – Questionnaire to travel agents, question 18.  
 
88 5.1.1.8  Air/rail overlaps  
(428)  The Transaction gives rise to affected air/rail overlap markets on the Edinburgh -
London, Birmingham -London, Birmingham -Glasgow, Man chester -Edinburgh and 
Manchester -Glasgow routes where Flybe operates air passenger transport services 
and Virgin Train operates train passenger transport services.  
(429)  The following table provides the market shares of Flybe and Virgin Train on the 
five air/ra il overlap routes.345  
 Summer 2018 IATA Season  Winter 2017/2018 IATA Season  
 Virgin 
Trains  Flybe  combined  Virgin 
Trains  Flybe  combined  
Edinburgh -
London  
(LHR/LCY -
EDI)346 [5-10]% [10-20]% [20-30]% [0-5]% [10-20]% [10-20]% 
Birmingham -
Edinburgh (BHX -
EDI)347 [20-30]% [70-80]% [90-
100]% [20-30]% [70-80]% [90-100]% 
Birmingham -
Glasgow (BHX -
GLA)348 [20-30]% [70-80]% [90-
100]% [20-30]% [70-80]% [90-100]% 
Manchester -
Edinburgh  
(MAN -EDI)  [5-10]% [30-40]% [40-50]% [10-20]% [30-40]% [40-50]% 
Manchester -
Glasgow (MAN -
GLA)  [20-30]% [20-30]% [50-60]% [30-40]% [20-30]% [50-60]% 
                                                 
345  The Parties submitted t he air passenger data based on the DDS data base and the rail passenger data 
based on the Lennon database, a databased used by rail operators to allocate ticket revenue in 
circumstances where a passenger does not buy a ticket for a particular rail service.  The Parties 
explained that the Lennon database estimates, based on schedules and journey times, the number of 
passengers that would have travelled on particular trains and would allocate booking revenue 
accordingly. For indirect services, a booking would be allocated pro rata based on the journey time. 
See Form CO, paragraph 619. The Commission considers that for the purpose of this decision, the 
Lennon database is appropriate proxy to estimate Virgin Trains‘ market shares on the five air/rail 
overlap rout es. 
346  The Transaction does not give raise to an affected market if Lon3 or Lon5 is considered, see From CO 
paragraph 657 and 659. The Commission applies a cautious approach and assesses the effects of the 
Transaction on the LHR/LCY -EDI airport pair.  
347 The combined market shares post -Transaction do not differ materially, irrespective of whether BHX 
and EMA airports are considered substitutable or not; Form CO, paragraphs 670 and 671.  
348  The combined market shares post -Transaction do not differ materially,  irrespective of whether BHX 
and EMA airports are considered substitutable or not; Form CO, paragraphs 679 and 680.  
 
89 (430)  Despite high to very high combined intermodal market shares on four of these 
overlapping routes, the proposed Transaction will not raise serious doubts for the 
following reasons.  
(431)  As explained in Section 4.10, Virgin Trains only operates train services under the 
current rail franchise until November 2019. A third  party train operator will be 
operating  these routes under the new West Coast Partnership Franchise as of 
November 2019. A s a result, the Transaction gives only rise to air/rail overlaps 
until November 2019.  
(432)  The Parties explained that Virgin Trains sets its fare prices […]. While certain fares 
on the train routes are price -regulated and […], Virgin Trains also offers fares that 
are not price -regulated. Virgin Trains reviews the prices for its non -regulated fares 
[Details about Virgin Trains price setting strategy ].349 [Details about Virgin Trains 
price setting strategy ]. 
(433)  With regard to the train  schedules, [details about Virgin Trains schedule  setting 
strategy ].350  
(434)  As a result, the Commission considers that the no long-lasting changes to the 
current pricing and schedule are to be expected until the end of the current rail 
franchise.  
(435)  In the light of the above, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market on any of the 
air/rail overlap routes.  
5.1.1.9  Conclusion on passenger air transport services under the O&D approach  
(436)  The Comm ission therefore considers that the Transaction raises serious doubts as 
to its compatibility with the internal market with respect to the Birmingham -
Amsterdam route and the Birmingham -Paris route.  
5.1.2 Passenger air transport services under the airport -by-airport approach  
5.1.2.1   Introduction  
(437)  According to paragraph 36 of the Horizontal Merger Guidelines,351 “some 
proposed mergers would, if allowed to proceed, significantly impede effective 
competition by leaving the merged firm in a position where it would have the 
ability and incentive to make the expansion of smaller firms and potential 
competitors more difficult or otherwise restrict the ability of rival firms to compete. 
In such a case, competitors may not, either individually or in the aggregate, be in a 
position t o constrain the merged entity to such a degree that it would not increase 
prices or take other actions detrimental to competition. For instance, the merged 
entity may have such a degree of control, or influence over, the supply of inputs or 
                                                 
349  Form CO, paragraph 641.  
350  Form CO, paragraph 642 et seq.  
351  Guidelines on the assessment of horizontal mergers under the Council Regulat ion on the control of 
concentrations between undertakings, OJ C 31, 5 February 2017, p. 5.  
 
90 distribution po ssibilities that expansion or entry by rival firms may be more 
costly. ” 
(438)  As explained in Section 4.2 above, the Transaction entails the increase of the 
Parties’ combined slot holding at airports where their slot portfolios overlap. Flybe, 
Stobart and Virgin  Atlantic (including its current and future shareholders Delta and 
AFKL) had overlapping slot portfolios at 29 coordinated Level  3 airports in 
Summer 2018 and at 27 coordinated Level 3 airports in  Winter 2018/2019 IATA 
Season.352  
(439)  For the sake of completeness, it must be noted that Flybe does not hold any historic 
rights on the slots operated at London Heathrow airport. These slots are operated 
under the commitments in case M.6447 – IAG/bmi . Flybe also flies between 
London Heathrow airport and Guernsey using slots leased from Virgin Atlantic.353  
(440)  Accordingly, after setting out the framework of its assessment, the Commission 
will first assess whether the Transaction, by reinforcing the Parties ’ slot holding at 
a number of airports and g ranting it broader access to their infrastructure, gives the 
Parties the ability and incentive to prevent other air carriers from getting access to 
airport infrastructure and therefore to the markets for the provision of passenger air 
transport services fr om those airports, preventing or reducing competition on those 
markets. The Commission will then analyse the overall effects of the Parties’ slot 
holding position on the ability of the Parties’ rivals to compete at the relevant 
airports.  
5.1.2.2  Framework for the  assessment of possible  foreclosure of competitors’ access to 
the markets for the provision of passengers air transport services  
(441)  An air carrier may harm competition on the market for the provision of passenger 
air transport services through a foreclosure s trategy only if this air carrier has both 
the ability and the incentive to foreclose access of competitors to the markets for 
the provision of passenger air transport services at a given airport.  
5.1.2.2.1  Ability to foreclose access to the markets for the provisio n of passenger air 
transport services  
5.1.2.2.1.1  Conditions for the ability to foreclose access to the markets for the provision 
of passenger air transport services  
(442)  In line with its prior decisional practice, the Commission considers that, for the 
Parties to be able to foreclose their competitors post -Transaction, the following 
cumulative conditions must be fulfilled: (i) the slots that the Parties would hold 
post-Transaction represent a significant share of the airport capacity, in particular at 
peak times; (ii) the Transaction has a material impact on the Parties ’ slot holding at 
the airport, in particular at peak times; and (iii) the Parties’ slot holding could 
                                                 
352  Form CO, paragraph 750 and annexes B.11 and B.12.  
353  Form CO, paragraph 754.  
 
91 negatively affect the overall availability of slots as an input for the passenger air 
transport markets to  or from the relevant airport.354  
(443)  In the present case, in line with its prior decisional practice, the Commission 
considers it not necessary to assess whether the third condition (i.e. the negative 
impact on the overall availability of slots) is fulfilled w ith respect to airports where 
the combined slot holding post -Transaction does not represent a significant share of 
the capacity and where the Transaction has no material impact on any of the 
Parties’ slot holding.355  
(444)  In assessing whether the merged entity w ould have the ability to foreclose, the 
Commission considers whether rival firms would be likely to deploy effective and 
timely counter -strategies in case of foreclosure. In this case, the Commission notes 
that there are limited effective and timely counte r-strategies that the Parties’ 
competitors would be likely to deploy in the case of a foreclosure strategy by any 
of them. There is no possibility for an air carrier to be less reliant on access to 
airport infrastructure and very limited possibility to spo nsor the expansion of 
airport capacity or the opening of new airports.356  
(445)  In light of the above, the Commission will assess the ability of the Parties post -
Transaction to foreclose access to the markets for the provision of passenger air 
transport at the re levant airports by taking account of the following three factors 
together:357 (i) the share of slots held by the Parties post -Transaction at the airport 
or at substitutable airports being high, in particular at peak times, (ii) the increment 
in the Parties ’ slot holding brought about by the Transaction at the airport or at the 
substitutable airports being material, in particular at peak times and (iii) the level of 
congestion at the airport or the substitutable airports being high. Considering that 
the Partie s’ slot holdings at the relevant airports vary between the Summer and 
Winter IATA Seasons, the Commission will carry out separate assessments for 
each IATA Season.  
(446)  Before conducting an airport -by-airport assessment of the Parties’ ability to 
foreclose acc ess to the markets for the provision of passenger air transport, the 
Commission will detail the methodologies for determining the slot holding post -
Transaction, the increment brought about by the Transaction and the congestion 
rate. 
                                                 
354  See e.g. Cases M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic, paragr aph 406; 
M.8869 – Ryanair/LaudaMotion , paragraph 508, M.8672 – easyJet/Certain Air Berlin Assets , 
paragraph 105; M.8633 – Lufthansa/Certain Air Berlin Assets , paragraph 182.  
355  See e.g. Cases M.8964 – Delta/Air France -KLM/Virgin Group/Virgin Atlantic, para graph 407; 
M.8869 – Ryanair/LaudaMotion , paragraph 509.  
356  Without prejudice to the exceptional cases of joint ventures between an airport manager and an airline 
(see e.g. the joint venture between Lufthansa and Flughafen München GmbH, the company managing  
Munich airport).  
357  As explained in paragraph (444)  above, given that the three conditions are cumulative, there is no need 
to assess the third condition at airports for which the first two conditions are not fulfilled.  
 
92 5.1.2.2.1.2  Methodologies  
(447)  A slot holding is defined as the ratio between the number of slots held by an air 
carrier (or the air carriers that are part of the same group) at an airport and the total 
available slots at that airport (i.e. the airport runway capacity).  
(448)  The Parties have estima ted their slot holdings at the different airports using the 
information from (i) the UK slot coordinator for data relating to the UK airports 
and (ii) the e -airport  slots website and the DIIO for the non -UK airports.358 The 
Commission has checked the overall  accuracy of the data submitted by the Parties 
against the information gathered from publicly available sources and slot 
coordinators during the market investigation.359 
(449)  For each of Summer and Winter IATA Season, the Commission has considered 
two values for the Parties’ slot holding post -Transaction: (i) their average slot 
holding during the opening hours of the airport,360 and (ii) their average slot 
holding during peak times.361 
(450)  As regards  the average slot holding during peak time and adopting a conservative 
approach, the Commission has calculated the Parties’ combined highest slot 
holding at any given hour band throughout the whole week (including any peak 
hour), which exceeds their combined average slot holding during peak times.362  
(451)  The “gross increment ” of the Parties’ slot holding corresponds to the difference 
between the Parties’ slot holding post -Transaction and the Parties’ slot holding pre -
Transaction. This also reflects the situation absent the Transaction in which Flybe 
would have been acquired by  a third party buyer.  
(452)  The “net increment ” is the difference between the number of slots obtained through 
the Transaction and the number of slots that AFKL would have obtained in the 
                                                 
358  Form CO, paragraph 788. The Commission has cross -checked the data on slot holding pr ovided by the 
Parties against data publicly available on slot coordinators websites.  
359  See e.g. https://slotcoordination nl/slot -allocation/declared -capacity/  and eQ4a – Quest ionnaire to Slot 
Coordinator ACNL  and eQ4b – Questionnaire to Slot Coordinator COHOR .  
360  For airports open 24/7, the opening hours are assumed on the basis of the number of total arrival and 
departure slots allocated by hour band.  
361  The Parties have con sidered that peak times comprised the hour bands between 6:00 -9:59 and 17:00 -
20:59 UTC. For the sake of completeness, the Commission has also considered alternative definitions 
of peak times such as hour bands when the congestion rate was above a certain t hreshold. However, 
the competition assessment would remain unchanged, under any plausible definition of peak times.  
362  The Parties submitted that peak time comprises the hour bands between 6:00 -9:59 and 17:00 -20:59 
UTC. Considering that the Transaction is  unlikely to raise serious doubts under the airport -by-airport 
approach under any definition of “peak time”, the Commission will adopt the most conservative 
approach and consider the Parties’ highest slot holding at any given hour band.  
 
93 situation absent the Transaction where Flybe would have exited the market for 
passenger air transport and where its slots would have returned to the pool.363  
(453)  To assess the impact of the Transaction, the Commission therefore considers the 
Parties’ combined slot holding post -Transaction, as well as the net and gross 
increments364 in the Parties’ slot holding as a result of the Transaction.  
5.1.2.2.2  Incentive to foreclose access to the markets for the provision of passenger air 
transport services  
(454)  A dominant carrier at a relevant airport would in principle have a strong incentive 
to pursue a fo reclosure strategy, as any new service or expansion by another carrier 
would be likely to introduce or increase competition on one of the dominant 
carrier’s routes. Such dominant carrier would have a greater incentive than any 
other carrier at the airport to keep slots out of reach of other carriers. The incentive 
to foreclose would also grow with the increased size of the slot portfolio it would 
control at the airport.  
(455)  Therefore, the Commission needs to analyse (i) the market shares of the merged 
entity i n the relevant passenger air transport markets; and (ii) the relative capacity 
constraints faced by the merged entity and its competitors.  
5.1.2.2.3  Overall effect on competition for passenger air transport services  
(456)  Effective competition would be significantly harme d if the foreclosed air carriers 
played a sufficiently important role in the competitive process on the passenger air 
transport markets to and from the overlap airports. The higher the proportion of 
carriers which would be foreclosed on these markets, the more likely it would be 
that the merger would result in a significant price increase in the passenger air 
transport markets and, therefore, to significantly impede effective competition 
therein.  
(457)  The Commission notes that, when an air carrier holds a signi ficant slot portfolio at 
a given airport while the remaining slot holding is very fragmented and slots are 
held by a large number of small air carriers, the latter are unable to translate these 
slots into a viable alternative to dominant air carriers.365 
                                                 
363  As explained in  Section 4.9 above, absent the Transaction in a scenario where Flybe would have exited 
the market, the Parties would have likely obtained some of Flybe’s slots returned to the pool at the 
airports where they also hold slots, based on their current position  at the relevant airport.  
364  Considering that the Commission left open whether Flybe would have exited the market or continued 
flying following its acquisition by another buyer, the Commission will consider both the net and the 
gross increments, as releva nt. At the airports where the combined slot holding is moderate, the 
Commission will take account of the gross increment, adopting a conservative approach. In any event, 
the competitive assessment would remain unchanged, should the Commission take account of the net 
increment.  
365  See paragraph 27 of the Explanatory Memorandum to the Commission Proposal for a Regulation of 
the European Parliament and of the Council on common rules for the allocation of slots at European 
Union airports (COM/2011/827 final of 01 December 2011).  
 
94 5.1.2.3  Assessment of the effects of the Transaction on passenger air transport services 
under the airport -by-airport approach  
5.1.2.3.1  Assessment for Amsterdam Schiphol airport  
(458)  In Summer 2018 and Winter 2018/2019 IATA Seasons, AFKL, Delta and Flybe 
held slots (and historic r ights thereto) at Amsterdam Schiphol airport. The 
Commission will first assess whether the Parties have the ability to foreclose access 
to the market for the provision of passenger air transport services Amsterdam 
Schiphol airport.  
Ability to foreclose  
Slot holding and increment brought about by the Transaction  
Table 1 – Parties’ slot holding – Summer 2019366 
Summer  Average slot holding367 Highest slot holding  
Airport  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
AMS  
Arrival  [50-
60]% [50-
60]% [0-5]% [0-5]% [70-
80]% [70-
80]% 
Hour band 
17:00 -
17:59  [0-5]% [0-5]% 
AMS  
Departure  [40-
50]% [40-
50]% [0-5]% [0-5]% [70-
80]% [70-
80]% 
Hour band 
7:00-7:59 [0-5]% [0-5]% 
Source: Form CO, paragraph 801 and Annex B.12 . 
(459)  In Summer 2019, the Parties estimate that their combined average slot holding 
post-Transaction at Amsterdam Schiphol airport would be [50-60]% with a gross 
increment of [0-5]% and a net increment of [0-5]% for arrival slots and [40-50]% 
with a gross increment of [0-5]% and a net increment of [0-5]% for departure slots.  
(460)  For arrival slots, the Parties’ highest slot holding during any specific hour band at 
Amsterdam Schiphol airport would reach [70-80]% with a gross increment below 
[0-5]% and a net increment below [0-5]%. This hour band corresponds to the third 
most congested hour band at Amsterdam Schiphol airport. For departure slots, the 
Parties’ highest slot holding during any specific hour band at A msterdam Schiphol 
airport would reach [70-80]% with a gross increment of [0-5]% and a net increment 
below [0-5]%. This hour band corresponds to the most congested hour band at 
Amsterdam Schiphol airport.  
                                                 
366  Considering that “total” slot holding data are not available for Amsterdam Schiphol airport, the Parties 
have distinguished between arrival and departure slots.  
367 The Parties have considered that Amsterdam Schiphol’s assumed opening h ours were 04:00 -21:00 
UTC.  
 
95 (461)  In Summer 2019 IATA Season, the Parties’ average sl ot holding post -Transaction 
would be more than [50-60]% of the available arrival slot capacity at Amsterdam 
Schiphol airport and more than [40-50]% with respect to available departure slot 
capacity. During some hour bands, the Parties’ combined slot holding would 
represent most of the available capacity (e.g. more than [70-80]% of available 
departure and arrival slots). The net increment brought abo ut by the Transaction is 
not insignificant (on average [0-5]% for arrival slots and [0-5]% for departure 
slots). Therefore, it cannot be excluded that the Transaction will have a material 
impact o n the Parties’ slot holding at Amsterdam Schiphol airport in  Summer 2019 
IATA Season.  
Table 2 – Parties’ slot holding - Winter368 
Winter  Average slot holding369 Highest slot holding  
Airport  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
AMS  
Arrival  [40-
50]% [40-
50]% [0-5]% [0-5]% [70-
80]% [70-
80]% 
Hour band 
7:00-7:59 [0-5]% [0-5]% 
AMS  
Departure  [40-
50]% [40-
50]% [0-5]% [0-5]% [60-
70]% [70-
80]% 
Hour band 
8:00-8:59 [0-5]% [0-5]% 
Source: Form CO, paragraph 806 and annex B.12.  
(462)  In Winter 2019/2020 IATA Season, the Parties estimate that their combined 
average slot holding post -Transaction at Amsterdam Schiphol airport would be 
[40-50]% with a gross increment of [0-5]% for arrival slots and [40-50]% with a 
gross increment of [0-5]% and a net increment of [0-5]% for departure slots.  
(463)  For arrival slots, the Parties’ highest slot holding during any specific hour band at 
Amsterdam Schiphol airport would reach [70-80]% with  a gross increment of [0-
5]% and a net increment of [0-5]% in Winter 2019/2020 IATA Season. This hour 
band corresponds to the second most congested hour band at Amsterdam Schiphol 
airport. For departure slots, the Parties’ highest slot holding during any s pecific 
hour band at Amsterdam Schiphol airport would reach [70-80]% with a gross 
increment of [0-5]% and a net increment of [0-5]%. This hour band corresponds to 
the most congested hour band at Amsterdam Schiphol airport.  
(464)  In Winter 2019/2020 IATA Season, the Parties’ average slot holding post -
Transaction would be more than [40-50]% of the available arrival and departure 
capacity at Amsterdam Schiphol airport but below [40-50]%. During some hour 
bands, the Parties’ combined slot holding would represent most  of the available 
                                                 
368  Considering that “total” slot holding data are not available for Amsterdam Schiphol airport, the Parties 
have distinguished between arrival and departure slots.  
369 The Parties have considered that Amsterdam Schiphol’s assumed o pening hours were 04:00 -21:00 
UTC.  
 
96 capacity (e.g. more than [70-80]% of available departure and arrival slots). 
Therefore, it cannot  be excluded that the Parties’ share of airport capacity post -
Transaction would enable them to foreclose access of other carriers to the mark et 
for the provision of passenger air transport services at Amsterdam Schiphol airport 
in Winter IATA Season.  
(465)  The net increment brought about by the Transaction is not insignificant (on average 
[0-5]% for arrival slots and [0-5]% for departure slots). The refore, it cannot be 
excluded that the Transaction will have a material impact o n the Parties’ slot 
holding at Amsterdam Schiphol airport in Winter 2019 IATA Season.  
Congestion  
(466)  In Summer 2018, the average congestion rate during the effective opening hours  of 
Amsterdam Schiphol airport amounted to 83.1% with respect to arrival slots, and 
75.4% with respect to departure slots.370 The airport reached its highest congestion 
level during the hour band 5:00 -5:59 UTC with a congestion rate of 96.8% with 
respect to arrival slots.371 As regards departure slots, the airport reached its highest 
congestion level during the hour band 7:00 -7:59 UTC with a congestion rate of 
91.4%.372 
(467)  In Winter 2018/2019, the average congestion rate during the effective opening 
hours of Amsterd am Schiphol airport amounted to 77.0% with respect to arrival 
slots, and 69.1% with respect to departure slots.373 The airport reached its highest 
congestion level during the hour band 18:00 -18:59 UTC with a congestion rate of 
96.0% with respect to arrival s lots.374 As regards departure slots, the airport 
reached its highest congestion level during the hour band 8:00 -8:59 UTC with a 
congestion rate of 93.2%.375 
(468)  Therefore, the available capacity at Amsterdam Schiphol airport is limited in both 
relevant IATA Season s.  
Conclusion on the ability to foreclose access to the market for the provision of passenger 
air transport services at Amsterdam Schiphol  
(469)  In Summer IATA Season, considering (i) the Parties’ significant share of the 
airport capacity post -Transaction (appr oximately [50-60]% for arrival slots and 
[40-50]% for departure slots on average and up to approximately [70-80]% at peak 
times), (ii) the potentially material impact of the Transaction on the Parties’ slot 
holding, and (iii) the limited airport capacity a vailable at Amsterdam Schiphol, it 
                                                 
370  Form CO, paragraph 810.  
371  Form CO, annex B.12.  
372  Form CO, annex B.12.  
373  Form CO, paragraph 810.  
374  Form CO, annex B.12.  
375  Form CO, annex B.12.  
 
97 cannot be excluded that the Transaction might give the Parties the ability to 
foreclose access of other carriers to the markets for the provision of passenger air 
transport services. In any event, it is not necessary to c onclude whether the Parties 
would have, post -Transaction, the ability to foreclose access of other air carriers to 
the market for the provision of passenger air transport services at Amsterdam 
Schiphol airport since the Parties would not have the incentive  to foreclose access 
of competitors to this market, as explained in paragraph (477)  below.  
(470)  In Winter IATA Season, considering (i) the Parties’ potentially significant share of 
the airport capacity post -Transaction (above [40-50]% for arrival and departure 
slots on average) ( ii) the potentially material impact of the Transaction on the 
Parties’ slot holding, and (iii) the limited airport capacity available at Amsterdam 
Schiphol, it cannot be excluded that the Transaction might give the Parties the 
ability to foreclose access o f other carriers to the markets for the provision of 
passenger air transport services. In any event, it is not necessary to conclude 
whether the Parties would have, post -Transaction, the ability to foreclose access of 
other air carriers to the market for t he provision of passenger air transport services 
at Amsterdam Schiphol airport since the Parties would not have the incentive to 
foreclose access of competitors to this market, as explained in paragraph (477)  
below.  
Incentive to foreclose  
(471)  Considering that  it cannot be excluded  that the Parties have the ability to foreclose 
access of competitors to the market for the provision of passenger air transpor t 
services at Amsterdam Schiphol in both Summer and Winter IATA Season, the 
Commission will assess whether the Parties would have, post -Transaction, the 
incentive to foreclose access to the market for the provision of passenger air 
transport services at Am sterdam Schiphol.  
(472)  The merged entity would have a strong position at Amsterdam Schiphol airport. 
The combined market share of AFKL, Delta and Flybe on the market for the 
provision of passenger air transport (calculated in terms of passenger transported) 
was [50-60]% in Winter 2018/2018 IATA Season, and [50-60]% in Summer 2018 
IATA Season.  
Table 3 – Parties’ shares of passengers at Amsterdam Schiphol and Paris Charles 
de Gaulle airports  
  Share of passengers transported to/from airport  
Airport  Season  Delta  AFKL  Flybe  
AMS  W17/18  [0-5]% [50-60]% [0-5]% 
AMS  S18 [5-10]% [50-60]% [0-5]% 
Source: Form CO, paragraph 757. Figures based on DDS data.  
(473)  However, Flybe’s share in passenger air transport services was not material ( [0-
5]% in both IATA Seasons), contrary to AFKL’s share, which amounted to [50-
60]% in Winter 2017/2018 IATA Season and [50-60]% in Summer 2018 IATA 
 
98 Season (in terms of passengers transported). In addition, as explained in Section 2.1 
above, Flybe operates small  turboprop aircraft with 78 or fewer seats and is not a 
home -based carrier at Amsterdam Schiphol airport. 376 In contrast, TUI fly and 
easyJet have a base at Amsterdam Schiphol.377 
(474)  Therefore,  the merged entity’s market position at Amsterdam Schiphol in terms o f 
shares of passengers will not materially increase as a result of the Transaction. It 
follows that  the merged entity’s strong slot holding position at Amsterdam 
Schiphol airport is unlikely to enable it to materially increase its operations at 
Amsterdam S chiphol airport  compared to the situation pre -Transaction . 
Considering that the merged entity is unlikely to be able to capture the demand 
from any potentially foreclosed competitors,378 the merged entity is unlikely to 
have the incentive to foreclose access  to the markets for the provision of passenger 
air transport at Amsterdam Schiphol airport.  
(475)  In addition, the Commission notes that it has not found material evidence during its 
market investigation that the Parties have previously engaged in any foreclosu re 
strategy or that the reinforcement of their position at Amsterdam Schiphol airport 
had, as an objective or consequence, to prevent the entry or expansion of 
competitors through exclusionary practices such as slot hoarding or slot 
shuffling.379 Furthermore , competitors having expressed a view gave mixed replies 
as to whether Connect Airways would have the incentive, post -Transaction, to 
prevent competitors from providing passenger air transport to or from Paris Charles 
de Gaulle and Amsterdam airports.380 An air carrier indicated that it does not 
believe “that the combined slot holding was a driving factor for the 
Transaction .”381 
(476)  The absence of an incentive to foreclose is reinforced by the fact that Connect 
Airways’ shareholders seem not to have an alignment o f interest with respect to the 
                                                 
376  Form CO, paragraph 756.  
377  See Annual Report 2018 Royal Schiphol Group, p.53. Available online 
https://www.annualreportschiphol.com/pdfondemand/printpdf?docId=192807  . 
378  In 2018, easyJet transpor ted 5 987 542 passengers and TUIfly transported 1 880 752 passengers while 
Flybe transported 809 991 passengers.  
379  For completeness, the Commission notes that the Netherlands Authority for Consumers and Markets 
(ACM) established that KLM and Amsterdam Ai rport Schiphol discussions related to the airport’s 
strategy (e.g. facilities provided to other airlines, airport charges) might present anticompetitive risks 
(no violation was established). Therefore, KLM and Schiphol committed (i) not to contact each oth er 
about limiting the growth opportunities of other airlines, (ii) Schiphol will develop its own plans for 
investments, airport charges and marketing strategy, and (iii) KLM and Schiphol will not have any 
contact about requests for bases, lounges, or other  specific facilities of other airlines. However, for the 
purpose of the assessment of the Transaction, the Commission considers that these Commitments are 
not related to exclusionary practices linked to AFKL’s slot holding at AMS.  
 See ACM’s press release  available online https://www.acm nl/en/publications/commitments -klm-and-
schiphol -acm-level -playing -field-schiphol -airport .  
380 Replies to eQ1 – Questionnaire to Airlines, question 20.  
381  Reply of an air carrier to eQ1 – Questionnaire to Airlines, question 20.  
 
99 use of Connect Airways’ slots. The Parties submit that post -Transaction, AFKL 
and Flybe cannot be viewed as a single undertaking with respect to slot holding. 
They consider that Flybe and AFKL will remain two separate airline s, operating 
independently and each making use of its own portfolio of slots. They further 
submit that AFKL will not have any rights to influence the commercial decisions of 
Flybe in respect of its slots, as a result of its minority shareholding in Virgin 
Atlantic, which itself will be a minority shareholder of Flybe through Connect 
Airways post -Transaction.382 While, as noted in Section 4 above, the unbroken 
chain of control does not preclude the Commission to consider that the Parties are 
part of one single undertaking whose slots could be transferred between parents and 
subsidiaries (e.g. between Flybe and AF KL), the Commission notes that two of 
Flybe’s shareholders (namely Stobart Air and Cyrus) do not have any structural 
link with AFKL and they do not hold slots at Amsterdam Schiphol or Paris Charles 
de Gaulle. Therefore, a foreclosure strategy could only be  instigated by AFKL (or 
to a lesser extent Delta) using its own portfolio of slots and capacity. The 
Commission considers it unlikely that Stobart Air and Cyrus would approve of  any 
foreclosure strategy instigated by AFKL , as they would not benefit from su ch 
strategy . Should AFKL have the ability and the incentive post -Transaction to 
engage into a foreclosure strategy (quod non), Cyrus and Stobart would only bear 
the potential costs of not pursuing their own commercial strategy for Flybe with 
respect to pas senger air transport to and from Amsterdam Schiphol , without 
reaping any benefit . More specifically, internal documents show that […].383 In 
that respect, a discussion document prepared by Nyras for Stobart and Cyrus during 
the due diligence concludes that “[…]”.384 This shows that Stobart and Cyrus 
would rather be inclined to pursue Flybe’s current flight operations rather than 
using the slots to prevent the entry or expansion of competitors and hence 
endangering Flybe’s profitability.  
(477)  Considering the inabili ty of the merged entity to capture the demand from 
potentially foreclosed competitors, the lack of material evidence of such past 
conduct and the absence of alignment of interest, the Commission concludes that 
the Parties are unlikely to have the incentive  to foreclose access of competitors to 
the market for the provision of passenger air transport at Amsterdam airport.  
Overall effect on competition for passenger air transport services  
(478)  The results of the market investigation with respect to the effect on co mpetition of 
the Transaction are mixed. While some competitors having expressed a view 
consider that the impact of the Transaction might be a “More difficult access [to 
airport infrastructure at AMS] ”,385 other air carriers consider that the impact of the 
Transaction would be rather neutral.386 More specifically, an air carrier indicated 
                                                 
382  Form CO, paragraph 758 et seq .  
383  See for example Form CO, annex A.21.G, Virgin Atlantic’s board presentation “ Foxtrot Investment 
Opportunity ”, 4 December 2018, p.16.  
384  Form CO, annex A.20.B, “Slot securitization to support transaction funding, 20 November 2018”  
385  Reply of an air carrier to eQ1 – Questionnaire to airlines, question 21.  
386  Replies to eQ1 – Questionnaire to airlines, question 21.  
 
100 that “Slots and infrastructure [at Amsterdam Schiphol] are constrained but we 
don’t expect a material change as a result of the Transaction. ”387  
(479)  However, the Commission notes th at the Parties will continue to face strong 
competition at Amsterdam Schiphol airports. At Amsterdam Schiphol airport, the 
Parties face competition from approximately 100 airlines, which accounted for 
more than [60-70]% of the total number of passengers tr ansported and which 
include easyJet, TUIfly, IAG Group and Lufthansa Group.388 These competitors 
will likely have the ability to react to any anti -competitive foreclosure strategy by 
the merged entity as a result of the Transaction, considering their respect ive slot 
portfolio. In particular, in Summer 2018 IATA Season, the portfolio of slots of a 
number of competitors was larger than Flybe’s own portfolio. While Flybe held [0-
5]% of the allocated slots, its competitors easyJet, IAG, Lufthansa Group and 
Scandi navian Airlines (SAS) held respectively [5-10]%, [5-10]%, [0-5]% and [0-
5]% of the allocated slots.389 
(480)  The Commission therefore considers that it is unlikely that the Transaction will 
harm effective competitive on the provision of passenger air transport ser vices at 
Amsterdam Schiphol airport .  
Conclusion  
(481)  In light of the above, and in particular the lack of incentive to foreclose access of 
competitors to the markets for the provision of passenger air transport at 
Amsterdam Schiphol  and the lack of effective competitive harm caused by any 
potential foreclosure strategy , the Commission concludes that the Transaction is 
unlikely to raise serious doubts as to its compatibility with the internal market with 
respect to passenger air trans port at Amsterdam under the airport -by-airport 
approach in both IATA Season.  
5.1.2.3.2  Assessment for Paris Charles de Gaulle airport  
(482)  In Summer 2018 and Winter 2018/2019 IATA Seasons, AFKL, Delta and Flybe 
held slots (and historic rights thereto) at Charles de Gaull e airport. The 
Commission will first assess whether the Parties have the ability to foreclose access 
to the market for the provision of passenger air transport services at Paris Charles 
de Gaulle airport.  
Ability to foreclose access to the market for the provision of passenger air transport 
services  
Slot holding and increment brought about by the Transaction  
                                                 
387  Reply of an air carrier to eQ1 – Questionnaire to airlines, question 19.  
388  See Annual Report 2018 Royal Schiphol Group, pp 51 -54. Available online 
https://www.annualreportschiphol.com/pdfondemand/printpdf?docId=192807  . 
389  Form CO, paragraph 808.  
 
101 Table 4 - Slot holding of the Parties - Summer  
Summer  Average slot holding390 Highest slot holding  
Airport  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
CDG  [30-
40]% [30-
40]% [0-5]% [0-5]% [50-
60]% [50-
60]% 
Hour band 
5:00-5:59 [0-5]% [0-5]% 
Source: Form CO, paragraph 830 and annex B.12.  
(483)  In Summer 2019 IATA Season, the Parties estimate that their combined average 
slot holding post -Transaction at Paris Charles de Gaulle airport would be [30-40]% 
with a gross increment of [0-5]% and a net increment of [0-5]%.  
(484)  The Parties’ highest slot holdi ng at Paris Charles de Gaulle airport in Summer 2019 
IATA Season would be [50-60]% with a gross increment of [0-5]% and a net 
increment below [0-5]%.  
(485)  However, this share of airport capacity is insufficient for the Parties to be able to 
foreclose other airlines as (i) it is possible for them to build up a substantial slot 
portfolio using the remaining [60-70]% of average airport capacity (and [40-50]% 
of airport capacity when the Parties’ slot holding is the highest), and (ii) as further 
explained below, there is available capacity at Paris Charles de Gaulle airport ( [30-
40]% on average during Summer 2018 IATA Season).  
Table 5 - Slot holding of the Parties - Winter  
Winter  Average slot holding391 Highest slot holding  
Airport  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
Pre-
Transaction  
Post-
Transaction  
Gross 
increment  
Net 
increment  
CDG  [30-
40]% [30-
40]% [0-5]% [0-5]% [50-
60]% [50-
60]% 
Hour band 
5:00-5:59 [0-5]% [0-5]% 
Source: Form CO, paragraph 836 and annex B.12.  
(486)  In Winter 2019/2020 IATA Season, the Parties estimate that their combined 
average slot holding post -Transaction at Paris Charles de Gaulle airport would be 
[30-40]% with a gross increment of [0-5]% and a net increment of [0-5]%.  
(487)  The Parties’ highest slot holding at Paris Charles de Gaulle airport in Winter 
2019/2020 IATA Season would be [50-60]% with a gross increment of [0-5]% and 
a net increment below [0-5]%.  
                                                 
390 The Parties have considered that the CDG assumed opening hours were 05:00 -22:00 UTC.  
391  The Parties have considered that the CDG assumed opening hours were 05:00 -22:00 UTC.  
 
102 (488)  However, this share of airport capacity is insufficient for the Parties to be able to 
foreclose  other airlines as (i) it is possible for them to build up a substantial slot 
portfolio using the remaining [60-70]% of average airport capacity (and [40-50]% 
of airport capacity when the Parties’ slot holding is the highest), and (ii) as further 
explained  below, there is available capacity at Paris Charles de Gaulle airport ( [30-
40]% on average during Winter 2018/2019 IATA Season).  
(489)  Therefore, the level of the Parties’ combined slot holding post -Transaction is 
unlikely to give rise to competition concerns i n both Summer and Winter IATA 
Seasons.  
Congestion  
(490)  In Summer 2018 IATA Season, the average congestion rate during the assumed 
opening hours amounted to 70%.392 The airport reached its highest congestion level 
during the hour band 10:00 -10:59 UTC, with a cong estion rate of 86%.393 
(491)  In Winter 2018/2019 IATA Season, the average congestion rate during the 
assumed opening hours amounted to 67%.394 The airport reached its highest 
congestion level during the hour band 11:00 -11:59 UTC, with a congestion rate of 
82.8%.395 
(492)  In both relevant IATA Season, although Paris Charles de Gaulle airport is 
coordinated, the actual level of congestion indicates that there are still slots 
available for entry or expansion at the airports, corresponding to, on average, 
approximately 30% of th e airport capacity.  
Conclusion on the ability to foreclose  
(493)  Given (i) the Parties’ limited slot holding position at Paris Charles de Gaulle airport 
post-Transaction (no more than [30-40]% on average) and (ii) the available slot 
capacity at Paris Charles de  Gaulle airport in both IATA Seasons ( [30-40]% on 
average), the Parties are unlikely to have post -Transaction a sufficient degree of 
market power to foreclose access of other carriers to the markets for the provision 
of passenger air transport services.  
Conclusion  
(494)  Considering that the Parties will not have, post -Transaction, the ability to foreclose 
access to the market for the provision of passenger air transport services at Paris 
Charles de Gaulle airport, and that, as explained in section 5.1.2.2  above , the 
conditions for foreclosing access to the market for the provision of passenger air 
services (ability and incentive) are cumulative, it is not necessary to assess whether 
                                                 
392  Form CO, paragraph 839.  
393 Form CO, annex B.12.  
394 Form CO, paragraph 839.  
395 Form CO, annex B.12.  
 
103 the Parties would have the incentive to foreclose access to the markets for the 
provision of passenger air transport services.  
(495)  In light of the above, the Commission concludes that the Transaction would not 
raise serious doubts as to its compatibility with the internal market with respect to 
passenger air transport services under the airport -by-airport approach at Paris 
Charles de Gaulle airport in both IATA Seasons.  
5.1.2.3.3  Assessment for the other overlap airports  
(496)  In Summer 2018, (i) AFKL and/or Delta and/or Virgin Atlantic and (ii) Flybe 
and/or Stobart Air held slots (and historic rights thereto) at 27 airports.396 In Winter 
2018/2019 IAT A Seasons, (i) AFKL and/or Delta and/or Virgin Atlantic and (ii) 
Flybe and/or Stobart Air held slots (and historic rights thereto) at 25 airports.397  
  
                                                 
396  Those are: Alicante (ALC), Arlanda (ARN), Birm ingham (BHX), Bristol (BRS), Dublin (DUB), 
Duesseldorf (DUS), Göteborg Landvetter (GOT), Geneva (GVA), Hannover (HAJ), Hamburg (HAM), 
Innsbruck (INN), London City (LCY), London Gatwick (LGW), Lyon -Saint -Exupery (LYS), 
Manchester (MAN), Munich (MUC), Milano  Malpensa (MXP), Nice Côte d’Azur (NCE), Palma de 
Mallorca (PMI), Prague (PRG), London Stansted (STN), Stuttgart (STR), Trondheim (TRD), Berlin -
Tegel (TXL), Venice (VCE), Vienna (VIE) and Zürich (ZRH).  
397 Those are: Alicante (ALC), Arlanda (ARN), Birmingham  (BHX), Bristol (BRS), Dublin (DUB), 
Duesseldorf (DUS), Göteborg Landvetter (GOT), Geneva (GVA), Hannover (HAJ), Hamburg (HAM), 
Innsbruck (INN), London City (LCY), London Gatwick (LGW), Lyon -Saint -Exupery (LYS), 
Manchester (MAN), Munich (MUC), Milano Malpe nsa (MXP), Nice Côte d’Azur (NCE), Palma de 
Mallorca (PMI), Prague (PRG), London Stansted (STN), Stuttgart (STR), Trondheim (TRD), Berlin -
Tegel (TXL) and Venice (VCE).  
 
104 Table 6 - Slot holding at the other overlap airports - Summer398 
Summer  Average slo t holding399 Highest slot holding  
Airport400 Virgin 
Atlantic401 Flybe 
(and 
Stobart 
Air) Post-
Transaction  Virgin 
Atlantic  Flybe 
(and 
Stobart 
Air) Post-
Transaction  
ALC  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
8:00-8:59 
ARN – 
arrival402 [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% 
Hour band 
09:00 -09:59  
ARN - 
departure  [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% [5-10]% 
Hour band 
12:00 -12:59  
BHX  [0-5]% [10-20]% [10-20]% [0-5]% [20-30]% [20-30]% 
Hour band 
17:00 -17:59  
BRS  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
12:00 -12:59  
DUB  [0-5]% [0-5]% [5-10]% [5-10]% [10-20]% [20-30]% 
Hour band 
07:00 -07:59  
DUS  [0-5]% [0-5]% [5-10]% [0-5]% [10-20]% [10-20]% 
Hour band 
15:00 -15:59  
GOT  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
20:00 -20:59  
GVA  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
09:00 -09:59  
                                                 
398  Considering that Flybe has at some airport a larger slot holding than Virgin Atlantic  (and its 
shareholders), Virgin Atlantic might account for the gross increment. The gross increment is in bold 
characters.  
399  In Summer IATA Season, Stobart Air holds has an immaterial average slot holding (< [0-5]%) at 
Dublin, London Gatwick, Milan Malpen sa, Prague and Vienna airports. Stobart Air’s slot holding is 
not included in the Pre -Transaction slot holding but in the Post -Transacation slot holding.  
400  Alicante (ALC), Arlanda (ARN), Birmingham (BHX), Bristol (BRS), Dublin (DUB), Du esseldorf 
(DUS), G öteborg Landvetter (GOT), Geneva (GVA), Hannover (HAJ), Hamburg (HAM), Innsbruck 
(INN), London City (LCY), London Gatwick (LGW), Lyon -Saint -Exupery (LYS), Manchester 
(MAN), Munich (MUC), Milano Malpensa (MXP), Nice Côte d’Azur (NCE), Palma de Mallorca 
(PMI ), Prague (PRG), London Stansted (STN), Stuttgart (STR), Trondheim (TRD), Berlin -Tegel 
(TXL), Venice (VCE), Vienna (VIE) and Zürich (ZRH).  
401  i.e. combined slot holding of Virgin Atlantic Airways, Delta and AFKL.  
402  Considering that “total” slot holding d ata are not available for Arlanda airport, the Parties have 
distinguished between arrival and departure slots.  
 
105 Summer  Average slo t holding399 Highest slot holding  
HAJ [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% [5-10]% 
Hour band 
19:00 -19:59  
HAM  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
19:00 -19:59  
INN [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
07:00 -07:59  
LCY  [0-5]% [5-10]% [5-10]% [5-10]% [10-20]% [20-30]% 
Hour band 
07:00 -07:59  
LGW  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
08:00 -08:59  
LYS  [10-20]% [0-5]% [10-20]% [30-40]% [0-5]% [30-40]% 
Hour band 
17:00 -17:59  
MAN  [0-5]% [10-20]% [10-20]% [5-10]% [10-20]% [10-20]% 
Hour band 
07:00 -07:59  
MUC  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
06:00 -06:59  
MXP 403 [0-5]% [0-5]% [5-10]% [5-10]% [5-10]% [10-20]% 
Hour band 
12:00 -12:59  
NCE  [5-10]% [0-5]% [5-10]% [10-20]% [0-5]% [10-20]% 
Hour band 
10:00 -10:59  
PMI [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
13:00 -13:59  
PRG  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
11:00 -11:59  
STN  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
15:00 -15:59  
STR [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
08:00 -08:59  
TRD 404 [0-5]% [0-5]% [0-5]% [10-20]% [0-5]% [10-20]% 
Hour band 
20:00 -20:59  
                                                 
403  Capacity  data is not available for this airport. Slot holding has been calculated in terms of share of slot 
allocated, in order to adopt a con servative approach.  
404  Capacity  data is not available for this airport. Slot holding has been calculated in terms of share of slot 
allocated, in order to adopt a conservative approach.  
 
106 Summer  Average slo t holding399 Highest slot holding  
TXL  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
07:00 -07:59  
VCE 405 [5-10]% [0-5]% [5-10]% [10-20]% [0-5]% [10-20]% 
Hour band 
04:00 -04:59  
VIE [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
17:00 -17:59  
ZRH  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
20:00 -20:59  
Source: Form CO, annex B.12  
(497)  In Summer 2019 IATA Season, the Parties estimate that their slot holding post -
Transaction at each of the other airports would be below [10-20]% on average 
during the relevant airport’s opening hours with a gross increment below [0-5]%. 
Their highest share during any specific hour band at each of these airports would 
reach no more than [30-40]% with a gross increment of [0-5]%.  
(498)  Therefore, the level of the Parties’ slot holding post -Transaction is unlikely to give 
rise to competition concerns at each of thes e 27 overlap airports in Summer 2019 
IATA Season.  
  
                                                 
405  Capacity  data is not available for this airport. Slot holding has been calculated in terms of share of slot 
allocated, in order to adopt a conservative approach.  
 
107 Table 7 – Parties’ slot holding at the other airports - Winter  
Winter  Average slot holding406 Highest slot holding  
Airport407 Virgin 
Atlantic408 Flybe (and 
Stobart Air)  Post-
Transaction  Virgin 
Atlantic  Flybe (and 
Stobart Air)  Post-
Transaction  
ALC  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
09:00 -09:59 
ARN - 
arrival409 [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% [5-10]% 
Hour band 
16:00 -16:59 
ARN - 
departure  [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% [5-10]% 
Hour band 
17:00 -17:59 
BHX  [0-5]% [10-20]% [10-20]% [0-5]% [20-30]% [20-30]% 
Hour band 
17:00 -17:59 
BRS  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
13:00 -13:59 
DUB  [0-5]% [0-5]% [0-5]% [5-10]% [10-20]% [10-20]% 
Hour band 
08:00 -08:59 
DUS  [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% [10-20]% 
Hour band 
16:00 -16:59 
                                                 
406  In Summer IATA Season, Stobart Air holds has an immaterial average slot holding (< [0-5]%) at 
Dubli n, London Gatwick, Milan Malpensa, Prague and Vienna airports. Stobart Air’s slot holding is 
not included in the Pre -Transaction slot holding but in the Post -Transacation slot holding.  
407  Alicante (ALC), Arlanda (ARN), Birmingham (BHX), Bristol (BRS), Dub lin (DUB), Du esseldorf 
(DUS), Göteborg Landvetter (GOT), Geneva (GVA), Hannover (HAJ), Hamburg (HAM), Innsbruck 
(INN), London City (LCY), London Gatwick (LGW), Lyon -Saint -Exupery (LYS), Manchester 
(MAN), Munich (MUC), Milano Malpensa (MXP), Nice Côte d’Azu r (NCE), Palma de Mallorca 
(PMI), Prague (PRG), London Stansted (STN), Stuttgart (STR), Trondheim (TRD), Berlin -Tegel 
(TXL), Venice (VCE).  
408  i.e. combined slot holding of Virgin Atlantic Airways, Delta and AFKL.  
409  Considering that “total” slot holding d ata are not available for Arlanda airport, the Parties have 
distinguished between arrival and departure slots.  
 
108 Winter  Average slot holding406 Highest slot holding  
GOT  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
22:00 -22:59 
GVA  [5-10]% [0-5]% [5-10]% [10-
20]% [0-5]% [10-20]% 
Hour band 
10:00 -10:59 
HAJ [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
13:00 -13:59 
HAM  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band  
16:00 -16:59 
INN [5-10]% [0-5]% [5-10]% [20-
30]% [0-5]% [20-30]% 
Hour band  
08:00 -08:59 
LCY  [0-5]% [5-10]% [5-10]% [5-
10]% [10-20]% [20-30]% 
Hour band 
08:00 -08:59 
LGW  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [5-10]% 
Hour band 
09:00 -09:59 
LYS  [10-20]% [0-5]% [10-20]% [30-
40]% [0-5]% [30-40]% 
Hour band 
18:00 -18:59 
MAN  [0-5]% [10-20]% [10-20]% [0-5]% [10-20]% [10-20]% 
Hour band 
11:00 -11:59 
MUC  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
08:00 -08:59 
MXP410 [0-5]% [0-5]% [5-10]% [5-10]% [0-5]% [10-20]% 
Hour band 
13:00 -13:59 
                                                 
410 Capacity  data is not available for this airport. Slot holding has been calculated in terms of share of slot 
allocated, in order to adopt a conservative approach.  
 
109 Winter  Average slot holding406 Highest slot holding  
NCE  [5-10]% [0-5]% [5-10]% [10-
20]% [0-5]% [10-20]% 
Hour band 
11:00 -11:59 
PMI [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
13:00 -13:59 
PRG  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
13:00 -13:59 
STN  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
Hour band 
10:00 -10:59 
STR [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
13:00 -13:59 
TRD411 [0-5]% [0-5]% [0-5]% [90-
100]% [0-5]% [90-100]% 
Hour band 
04:00 -04:59 
TXL  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% [5-10]% 
Hour band 
10:00 -10:59 
VCE412 [5-10]% [0-5]% [5-10]% [40-
50]% [0-5]% [40-50]% 
Hour band 
16:00 -16:59 
Source: Form CO, annex B.12  
(499)  In Winter 2019/2020 IATA Season, the Parties estimate that their slot holding post -
Transaction at each of the other airports would be below [10-20]% on average 
during the relevant airport’s opening hours with a gross increment of [0-5]%. Their 
highest shar e during any specific hour band at each of these airports would reach 
no more than [40-50]% with a negligible increment.  
                                                 
411  Capacity  data is not available for this airport. Slot holding has been calculated in terms of shar e of slot 
allocated, in order to adopt a conservative approach.  
412  Capacity  data is not available for this airport. Slot holding has been calculated in terms of share of slot 
allocated, in order to adopt a conservative approach.  
 
110 (500)  Therefore, the level of the Parties’ slot holding post -Transaction is unlikely to give 
rise to competition concerns at each of these 25  overlap airports in Winter 
2019/2020 IATA Season.413  
Congestion  
(501)  As explained in section 5.1.2.2.1  above, considering that the conditions to establish 
an ability to foreclose are cumulative and that the level of the Parties’ slot holding 
post-Transaction is unlikely to give rise to competition concerns at these overlap 
airports, the Commission does not  consider it necessary to assess the congestion 
rate at these airports.  
Conclusion on the ability to foreclose  
(502)  In light of the above, given the Parties’ combined slot holding at the relevant 27 
airports post -Transaction during the relevant IATA Seasons, the Commission 
considers that the Parties will not be likely to have the ability to foreclose 
competitors’ access  to the markets for the provision of passenger air transport 
services.  
Conclusion  
(503)  Considering that the Parties will not have, post -Transaction, the ability to foreclose 
access to the markets for the provision of passenger air transport services at these 
airports and that, as explained in section 5.1.2.2  above, the conditions for 
foreclosing access to the market for the provision of passenger air services (ability 
and incentive) are cumulative, it is not necessary to assess whether the Parties 
would have th e incentive to foreclose access to the markets for the provision of 
passenger air transport services.  
(504)  In light of the above, the Commission concludes that the Transaction would not 
raise serious doubts as to its compatibility with the internal market with  respect to 
passenger air transport services under the airport -by-airport approach at the 
relevant other overlap airports in both IATA Seasons.  
5.1.2.4  Conclusion on passenger air transport under the airport -by-airport approach  
(505)  In light of the above, the Commissi on concludes that the Transaction does not raise 
serious doubts as to its compatibility with the internal market with respect to 
passenger air transport services under the airport -by-airport approach at any of the 
relevant overlap airports in both IATA Sea sons.  
5.1.3 Feed er traffic  
5.1.3.1  Introduction  
(506)  As explained in Section 4.3 above, in the air transport sector, there is a variety of 
agreements whereby tickets m ay be sold for indirect  route  including two legs 
operated respectively by each party to the agreement. Interlining  and codesharing  
                                                 
413  In Winter IATA Season,  Vienna and Zurich airport are not overlap airports since neither Flybe nor 
Stobart holds slots at these airports.  
 
111 arrangements are in principle mutually beneficial as they give each party the 
opportunity to increase its load factors. In pr inciple, they also benefit passengers as 
they increase connection opportunities, allow passengers to be compensated in case 
of missed connections and spare them from taking back luggage at the connection 
airport. In particular for long -haul flights, traffi c made up by passengers connecting 
at either or both ends of the route is commonly referred to as “feeder traffic ”. 
(507)  The theory of harm examined in relation to feeder traffic relates to a risk of 
foreclosure whereby the merged entity would deny competing ai r carriers access or 
hamper their access (e.g. by raising the price charged for such access) to capacity 
on routes operated pre -Transaction by one of the merging parties, which could be 
used by that competing air carrier to attract feeder traffic. In parti cular, as regards 
the Transaction, Connect Airways could foreclose access by competing air carriers 
to routes previously flown by Flybe in relation to passengers wishing to connect at 
Amsterdam, Paris Charles de Gaulle, London Heathrow, Glasgow or Manchest er 
onto flights operated by such competing carriers to a destination where one or more 
of Connect Airways’ shareholders ( i.e. Virgin Atlantic  or its parents AFKL or  
Delta) also offers services from these (connecting) airports. For example, according 
to this theory of harm, Connect Airways could deny or hamper access to its flights 
to Manchester for passengers connecting onto a flight operated by another carrier 
from Manchester to Abu Dhabi (a destination where AFKL also operates). As a 
result, prices may increase on the Manchester -Abu Dhabi air transport market and 
any competitive constraint on Connect Airways  may be reduced on that market.  
(508)  Such a risk does not depen d on how the tickets for such indirect route s are 
distributed. Therefore, the assessment is the same no matter whether the two 
carriers are engaged in a vertical relationship or are acti ve in closely related 
markets414, providing the “inputs ” necessary to a sale of tickets for indirect route  
by a third party.415 For the sake of simplification, the terminology of the input 
foreclosure theory will be used to conduct this assessment.  
(509)  In order for foreclosure to occur and harm competition as a result of the 
Transa ction, the latter must confer on Connect Airways the ability and incentives to 
engage in such foreclosure, or increase such ability and incentives, and foreclosure 
must be likely to significantly impede effective competition.  
5.1.3.2   Overview of feeder traffic  provided by the Parties  
(510)  The assessment concerns Flybe’s and AFKL’s feeder traffic activities. Virgin 
Atlantic does not operate any short -haul flight which feeds its long -haul or third 
parties’ long -haul flights. Delta does not operate any short -haul flights in 
Europe.416 
                                                 
414 See Non Horizontal Merger Guidelines, paragraph 91.  
415 When a ticket for an indirect route is sold by a third party rather by one of the two  carriers, the theory 
of harm would take the form of foreclosure through tying. It refers to a situation where Virgin Atlantic 
(or either of its parents) would avoid selling one leg of the indirect route in isolation from the second 
one, thereby preventing  the sale of indirect routes combining a leg operated by Virgin Atlantic (or one 
of its parents) and one of its competitors on a given route.  
416  Form CO, paragraph 882.  
 
112 5.1.3.2.1  Flybe’s feeder traffic activities  
(511)  Flybe has entered into a number of interlining and codeshare agreements with third 
party carriers:417  
a) Flybe has codeshare agreements with […] long-haul and/ or short -haul carriers 
which allow these carriers to s ell tickets on Flybe ’s flights: […],418 […].  
b) Flybe has interline agreements with […] long-haul and/ or short -haul carriers 
which allow these carriers to issue tickets including one leg of the journey on 
Flybe's flights: […],419 […].  
c) Flybe also has interline agreements with other airlines within the scope of the 
IATA Multilateral Interline Traffic Agreement ( “MITA ”), including with […].  
d) Flybe has a […] codeshare with Air France on three routes (BHX -CDG, CDG -
EDI and CDG -MAN) . [confidential information about Fl ybe’s codeshare 
agreements with Air France ].420  
e) Flybe notably provides feed to/from several airports including AMS, GLA, LHR, 
MAN and CDG.  
(512)  The vast majority of Flybe’s  codeshares are [confidential information about  Flybe's 
codeshare agreements ].  
(513)  Most of these codesharing and interlining agreements enable the codeshare partner 
to sell the entire indirect route  combining Flybe ’s short -haul flight with their short -
haul or long -haul flight. [Confidential information on Flybe’s codeshare 
agreements ].  
(514)  The vast majority of Flybe ’s flights are flown point -to-point by passengers (and 
thus do not feed into the long -haul flight of another carrier ).421 This, however, does 
not mean that no other carrier relies to some extent on Flybe for feeder traffic, as 
Flybe  still provides a significant share of third party carriers ’ feeder traffic for 
certain long -haul flights, as will be demonstrated in Table 9 below.  
5.1.3.2.2  AFKL’s feeder activities  
(515)  By contrast with Flybe, many of AFKL ’s short -haul flights are used not only to 
meet local or point -to-point passengers,  but to provide feeder traffic to other s hort-
haul or long -haul flights operated by AFKL or third party carriers.  However, in  
                                                 
417  Form CO, paragraph 883.  
418 [Confidential information about Flybe’s commercial agreeme nts]. See Form CO, footnote 448.  
419 [Confidential information about Flybe’s commercial agreements] . 
420 [Confidential information about Flybe’s commercial strategy] . 
421 Form CO, paragraph 884.  

 
114 (518)  Table 9 below provides an overview of feeder traffic provided by Flybe and the 
Parties to other carriers on the relevant long -haul routes where the shareholders of 
Connect Airways (namely Virgin Atlan tic or its parents AFKL or Delta) operate. 
These routes and carriers have been selected on the basis of thresholds reflecting 
the importance of the feeder traffic provided by the Parties relative to the total 
number of passengers travelling on the services  provided by the carrier in question 
on the route.  
(519)  Consistent with the Commission ’s practice in the case IAG/bmi ,424 the criterion 
applied to select the routes is that feeder traffic provided by the Parties and Flybe 
combined  to the third party carrier service in question accounts for 3% or more of 
the total number of passengers on the third party carrier service, or the feeder 
traffic provided by Flybe accounts for 1% or more of the total number of 
passengers of the third par ty carrier on a relevant route for Winter 2017/18 and 
Summer 2018. In addition, only long -haul routes where either alone or together 
Virgin Atlantic, Delta or AFKL carried at least 10,000 passengers on an operating 
carrier basis in the last two completed I ATA seasons combined, are considered. On 
that basis, and  on the basis of  DDS data, 21 relevant routes at 4 airports (AMS, 
CDG, GLA, and MAN) were identified , as set out in Table 9 below .  
(520)  These thresholds focus the Commission ’s analysis on the routes where (i) feed 
from Flybe or from the Parties combined is higher than a de minimis  proportion of 
total passengers on the route, and therefore where a hypothe tical foreclosure may 
potentially impact the operations of the third party carriers; and (ii) Connect 
Airways’ shareholders’ operations to/from the same long -haul destination/origin, 
from/to the same connecting hub or from/to its own hubs, are non -negligib le and 
therefore they compete with the third party carrier.  
(521)  The applied thresholds are therefore adequate in the present case to focus the 
Commission ’s analyses of routes where feeder traffic could be a material aspect of 
operations for a third party carr ier. 
 
  
                                                 
424 Case No M.6447 – IAG/bmi , footnote 227; Case M.7541 – IAG/Aer Lingus , paragraph 462.  



 
118 5.1.3.3.2  No incentive to foreclose  
(528)  Even if the merged entity  was found to have the ability to foreclose access to its 
feeder traffic in Manchester (as this is where  Flybe ’s fee d on the relevant feeder 
routes represents the highest share of the passengers on the relevant third party 
carrier's flights ) (quod non) , the Notifying  Parties argue that it would  not have any 
incentive to foreclose access to its feeder traffic, since it would not be profitable for 
it (or it shareholders) to do so.436 For the purpose of proving this, the Parties have 
considered the gains Virgin Atlantic would make from carrying Thoma s Cook’s 
long-haul passengers themselves either through Manchester or other hubs on their 
own connecting flights against the losses it would incur (namely the lost margin on 
the short -haul Flybe flight to MAN).437   
(529)  The abovementioned analysis  by the Notifyin g Parties438 indeed demonstrates that  
this foreclosure strategy would not be profitable to Virgin Atlantic, since  on MAN -
MCO, Virgin Atlantic would gain on average GBP […]439 per passenger but would 
lose GBP […] per passenger, resulting in a net loss of GBP […]. On MAN -LAX, 
Virgin Atlantic would gain GBP […] per passenger but would lose GBP […] per 
passenger, resulting in a net loss of GBP […] per passenger. On MAN -LAS, Virgin 
Atlantic would gain on average GBP […] per passenger but would lose GBP […] 
per passe nger, resulting in a net loss of GBP […].440 
(530)  In addition, the Notifying Parties claim that, post -Transaction, the merged entity 
will remain subject to competition from other short -haul carriers which provide 
access to their flights for connecting services at  Manchester, including IAG and 
Lufthansa. According to the Notifying Parties, a foreclosure strategy leading to 
price increases or less attractive connecting flights for indirect routes at Manchester 
for their competitors would thus likely trigger a switch  of customers to indirect 
services via other hub airports, rather than a switch to services offered by the 
merged entity. The Parties explain that, for example, IAG airlines provide 
significant feed to Virgin Atlantic on MAN -Orlando ( [5,000 -10,000]  passeng ers) 
and MAN -SFO ( [0-5,000]  passengers). According to them, these actual (and 
potential) competitors will continue to constrain the merged entity  post-Transaction 
and any foreclosure strategy would therefore likely result in (i) third party airlines 
switch ing provider of feed (e.g. switching to IAG airlines or Lufthansa), and (ii) 
consumers switching airlines (including switching to fly over a different hub).441 
                                                                                                                                                 
435 Form CO, paragraphs 905 -907 and 962.  
436 Form CO, paragraph 964.  
437 Form CO, paragraphs 964 -965. For the purpose of this analysis, (i) Flybe provided [confidential 
pricing and cost information  used to undertake  the economic analysis on the profitability of a 
foreclosure strategy ]. 
438 See Annex B.14B to the Form CO  for the analysis . 
439 Converted at 1 EUR = 0.882 GBP; all EUR figures rounded to nearest EUR 1.  
440 See Annex  B.22 to the Form CO for the underling analysis in respect of MAN -LAS.  
441 Form CO, paragraph 961.  
 
119 (531)  In this respect, t he Parties believe that London Heathrow – where IAG has a hub 
and offers connect ing flights to/ from the UK and the Parties are also present – as 
well as Munich, Madrid, Dublin and Frankfurt will remain a very competitive 
alternative to connecting flights at Manchester post -Transaction. In the Parties ’ 
views, Loganair and EasyJet, with their growing worldwide proposition, are also 
alternatives for a long -haul carrier to obtain feed.442 
5.1.3.3.3  No anti -competitive impact  
(532)  The Notifying Parties claim that the Transaction does not result in less effective 
competition for access to feeder traffic,  since (i) Flybe's share of feeder traffic 
provided to third party carriers is very small such that the Transaction cannot result 
in a significant impediment to effective competition ; (ii) the merged entity would 
have no incentive to foreclose access to it s feeder traffic to third party carriers at 
MAN, AMS, CDG and GLA and (ii i) a foreclosure strategy leading to price 
increases or less attractive connecting flights for indirect routes connecting at AMS 
may trigger a switch of customers to indirect services  via other hub airports, rather 
than switching to AFKL ’s (or Virgin Atlantic ’s/Delta ’s) services.443 
5.1.3.4  Commission’s assessment  
5.1.3.4.1  Ability to foreclose  
(533)  Access to flights feeding traffic to  a route operated by an air carrier from/to its hub 
may constitute an essent ial input. Therefore, restriction of access to that input can 
potentially raise  competition problems.444 
(534)  Multilateral Interline Traffic Agreements ( “MITA ”) and Bilateral Interline Traffic 
Agreements ( “BITA ”) are typically open -ended and have a 30 day 
notice/ termination whereas SPAs are generally valid for one year and are 
renegotiated thereafter. It is also customary for SPAs to have a 30 day prior written 
notice termination clause that can be exercised by either carrier at any time, without 
cause. Codeshare agreements are typically open -ended and have various 
termination clauses. Most termination clauses for codeshare agreements include 3 
months, 6 months or 180 days prior written notice by either  party.445 
(535)  [Confidential information about  Flybe ’s inventory management system ], Connect 
Airways would , in theory , be able to terminate Flybe ’s current  feeder traffic  
agreements with third parties in the short term and, given this possibility, to impose 
on them a revision of such agreements on terms less favourable than pre -
Transaction.  
(536)  Table  10 above shows that feeder traffic provided by Flybe generally represents a 
relatively small share of the total of passengers  on third party carriers' long -haul 
                                                 
442 Form CO, paragraph 967.  
443 Form CO, paragraphs 923, 943 and 952.  
444 See Non -horizontal Merger Guidelines, paragraph 34.  
445 See Case M.7541 – IAG/Aer Lingus , footnote 383.  
 
120 flight on each relevant route. Out of the 21 relevant long -haul routes identified, 
Flybe ’s share was below [0-5]% on 5 routes, below [0-5]% on 7 routes and below 
[5-10]% on 5 routes.  
(537)  As demonstrated in Table 9 above, t he share of feeder traffic provided by Flybe is 
highest  (and constitutes an important input)  on 5 long-haul routes  connecting at 
Manchester airport , namely MAN -Boston ( “BOS ”) (amountin g to [30-40]% of 
Thomas Cook ’s total passengers on this route) ; MAN -Orlando ( “MCO ”) 
(amounting to [10-20]% of Thomas Cook ’s total passengers on this route) ; MAN -
San Francisco ( “SFO”) (amounting to [20-30]% of Thomas Cook's total passengers 
on this route) ; MAN -Los Angeles ( “LAX ”) (amounting to [20-30]% of Thomas 
Cook’s total passengers on this route)446; and MAN -Las Vegas ( “LAS ”) 
(amounting to [5-10]% of Thomas Cook’s total passengers on this route). However, 
Virgin Atlantic and Thomas Cook no longer compete on the MAN -BOS route as 
Thomas Cook exited this route at the end of Summer 2018, and on the MAN -SFO 
route as Virgin Atlantic exited this route at the end of Summer 2018.447  
(538)  Therefore, the relevant long -haul routes concerned by this Transaction to which 
Flybe currently provides a significant number of feeder passengers (as important 
input) to Thomas Cook are the routes from/via Manchester to Orlando, Las Vegas 
and Los Angeles.  
(539)   In light of  the foregoing , the Commission considers it unlikely that Connect 
Airwa ys would have the ability to foreclose access  to flights on the routes to/from 
Manchester currently operated by Flybe , except  for passengers connecting at 
Manchester flying to/from Los Angeles, where it  cannot be excluded that Connect 
Airways  may have this  ability, post -Transaction,  In any event, the Commission 
considers that it will not have the incentive to do so, as assessed in Section 
5.1.3.4.2  below. 
5.1.3.4.2  Incentive to foreclose  
(540)  The incentives for an airline to foreclose a competitor in the context of feeder 
traffic  were describe d by the Commission in the IAG/b mi decision.448 
(541)  In the present case, it cannot be excluded that Connect Airways could post-
Transaction  deny or hamper access to its flights – or raise the costs449 of such 
access – for passengers connecting (in particular at Manchester airport) onto long-
                                                 
446 This MAN -LAX route does not fall within the thresholds set out above, but Virgin Atlantic has started 
operating this route as of Summer 2019 (i.e. from 26 May 2019), and Thomas Cook is also active on 
this route.  
447 See Annex QP7 -Q15 to the Fo rm CO , which provides an article dated 30 May 2018 saying that the 
launch of the MAN -LAX service in Summer 2019 is " at the expense of the three times weekly San 
Francisco  service ". Virgin Atlantic exiting Manchester -San Francisco was part of the "changes t o the 
flying programme" which started in Summer 2019.  
448 M.6447  – IAG/bmi , paragraphs 535 and following.  
449 The costs of such access depend on fares and financial settlement rules set in the relevant interlining 
and special prorate agreements.  
 
121 haul flights to/from Los Angeles operated by another carrier on a route where this 
carrie r would compete with any of Connect Airways ’ shareholders  (Virgin Atlantic  
or its parents  AFKL  or Delta ). Thus, for example, Connect Airways could raise the 
prices for access to its feeder traffic connecting at Manchester, which may allow it 
to raise price s for such indirect routes where its shareholders operate (e.g. 
Amsterdam -Los Angeles via Manchester).  Connect Airways could also, for 
example,  divert away passengers from that competitor to the long -haul flights  
operated by its shareholders , with a view t o increasing load factors but also to 
weaken that competitor and pave the way for price increases. For example, by 
applying such a foreclosure strategy on various “feeder routes ” to passengers 
connecting onto services offered by a competitor on the Manches ter-Los Angeles 
route (where for, instance, AFKL also operates), Connect Airways  may reduce the 
number of passengers carried on this competitor ’s services between Manchester 
and Los Angeles . This competitor would then be weakened on this route and exert 
less competitive pressure on AFKL, thereby allowing it to raise prices, both for 
direct routes out of Manchester to Los Angeles and for indirect  routes via 
Manchester to Los Angeles . 
(542)  The ince ntive to foreclose depends on the degree to which foreclosure would be 
profitable. The merged entity  is expected to take into account how the provision of 
access to its flights for connecting passengers would affect its profits on that 
upstream market, but  also its profits on the downstream air passenger transport 
market. The merged entity would face a trade -off between the profit lost in the 
upstream market due to a reduction of input sales to (actual or potential) rivals and 
the profit gain ed, in the shor t or longer term, from expanding sales downstream or, 
as the case may be, being able to raise prices to consumers. The trade -off is likely 
to depend on the level of profits the merged entity obtains upstream and 
downstream. Other things being equal, the lo wer the margins upstream, the lower 
the loss from restricting input sales. Similarly, the higher the downstream margins, 
the higher the profit gain from increasing  market share downstream at the expense 
of foreclosed rival s.450 
(543)  As argued by the Notifying Par ties, and supported by the economic analysis 
provided by them  (see paragraph s (528) -(529)  above), the Commission agrees  that 
such a  foreclosure strategy would not be profitable to the merged entity  (Connect 
Airways or its shareholders).  In addition, the Commission understands and a grees 
with the Notifying Parties’ argument (see paragraph s (530) -(531) above) that a 
foreclosure strategy may lead the connecting passengers to switch services to a 
competing airline (other than Connect Airways or its shareholders) or to a different 
connecting airport.  
(544)  Indeed, i n this respect, respondents to the market investigation have indicated that 
passengers may, depending on the prices, overall travel duration, connecting time, 
schedules and frequencies, consider alternative connecting flights to Orlando , Los 
                                                 
450 Non Horizontal Merger Guidelines, paragraphs 40 –41. 
 
122 Angeles or Las Vegas via Dubli n451 or via London (Gatwick or Heathrow) or even 
Frankfurt or Paris  (or, to a lesser extent, Munich or Zurich ).452  
(545)  In light of the foregoing , the Commission considers that post -Transaction, Connect 
Airways is not likely to have the incentives to restrict access to its flights on the 
routes on which Flybe currently operates for passengers connecting onto flights 
competing with its shareholders ’ services.  
(546)  During the market investigation, Thomas Cook argued th at the Parties would have 
the ability and incentive to stop or reduce feeder traffic provided to it on the routes 
from/via Manchester to Bridgetown, Las Vegas, New York, Orlando, San 
Francisco and Los Angeles.453 
(547)  With regard to a possible reduction or termin ation by Connect Airways of its 
provision of feeder traffic to Thomas Cook on the relevant routes from /via 
Manchester , the Commission understands that Flybe Limited and Condor 
Flugdienst Gmbh , Thomas Cook’s subsidiary,  have entered into a Special Prorate 
Agreement dated 1 June 2019  which applies to all the Thomas Cook airlines (the 
“SPA ”). Pursuant to th is SPA, Thomas Cook is allowed to interline with Flybe 
pursuant to rates set out in the SPA. The SPA is valid for tickets issued between 1 
June 2019 and 31 May 2020,454 but either party has termination rights on 30 days' 
written notice.455 The Notifying Parties have expressed (and are prepared to issue a 
statement to this effect) that they  are prepared to commit that, post EUMR 
clearance, and in so far as it rela tes to routes involving Manchester Airport, 
Connect Airways  will not withdraw from the SPA pursuant to Clause 2.2. For the 
avoidance of doubt,  the Notifying Parties clarified that  Connect Airways would 
also have no intention to terminate the MITA between Flybe  and Condor/Thomas 
Cook  in this respect. 456  
(548)  The fact that the Commission has not found any evidence of such a  (past or future)  
incentive in the internal documents, and , in fact,  even found  an internal document 
which sets out  the “revenue risk ” for Fly be resulting from a situation where Virgin 
Atlantic’s (and Delta’s) long -haul competitors which currently receiv e feed from 
Flybe (including Thomas Cook)  no longer would accept or carry  such feed,457 
strengthens the credibility of this statement and the Comm ission’s finding  that 
                                                 
451 In particular for Manchester -Orlando (also, to a lesser extent, via London Gatwick).  See Replies to 
Questionnaire Q1 to Airlines, questions 24 -26; Questionnaire Q2 to Corporate Customers, questions 
10-12; Questionnaire Q3 to Travel Agents, questions 11 -13. 
452 See Replies to Questionnaire Q1 to Airlines, questions 24 -26; Questionnaire Q2 to Corporate 
Customers, questions 10 -12; Questionnaire Q3 to Travel Agents, questions 11 -13. 
453 See non -confidential rep ly by TCGA to Questionnaire Q1 to competitors, question 30.  
454 See Clause 2.1 of the SPA.  
455 Pursuant to Clause 2.2 of the SPA.  
456 See e -mail from the Parties of  7 June 2019.  
457 See documents submitted in response to Section 5.4 of the Form CO, in particular A nnex A.21E, p.39 
and the Notifying Parties’ Reply to QP5 of 2 May 2019.  
 
123 Connect Airways would have no incentive to foreclose access to its feeder flights 
post-Transaction.  
(549)  In light of the foregoing, the Commission concludes that Connect Airways is  not 
likely to have the incentive post -Transaction to forec lose access to its feeder 
flights .  
5.1.3.4.3  Overall likely impact  on effective  competition  
(550)  Anticompetitive foreclosure may occur when a vertical merger allows the parties to 
increase the costs of downstream rivals on the market thereby leading to an upward 
pressu re on their sales prices. Significant harm to effective competition normally 
requires that the foreclosed firms play a sufficiently important role in the 
competitive process on the downstream market.458 
(551)  During the market investigation, Thomas Cook argued that the loss of feeder traffic  
by Flybe would have a slight impact on load factors resulting in it having to reduce 
prices to maintain load factors, impacting revenue and profitability.  According to 
Thomas Cook, this would ultimately have a negative impac t on its long -haul flights 
(i.e. higher prices, lower services, etc.).459 
(552)  In light of the fact that, as established above, Connect Airways  is not likely to have 
an incentive post-Transaction  to foreclose access to Flybe's feeder traffic to third 
party carrie rs at MAN, AMS, CDG and GLA, and such a foreclosure strategy may 
lead customers to switch to competing  airlines and/or alternative  hub airports, the 
Commission considers the Transaction would not likely have detrimental effects on 
the long -haul routes out of the aforementioned connecting airports and thus not 
give rise to a significant impediment to effective competition  on the market s for the 
provision of access to flights of other carrier s for connecting passengers . 
5.1.3.5  Conclusion on feeder traffic  
(553)  In light o f the above , the Commission considers that the Transaction does not raise 
serious doubts as to its compatibility with the internal market as regards the 
provision of feeder traffic  to (long -haul)  services operated by other carriers .  
5.2 Dry leasing services to airlines  
(554)  Propius is currently dry -leasing […] intra-group to Stobart Air. From 2017 to 2018, 
Propius was dry -leasing three aircraft to Flybe.460 These relationships remain or 
become intra -group and are not relevant for the purposes of the Commissi on’s 
competitive assessment.  
                                                 
458 Non Horizontal Merger Guidelines, paragraph 48.  
459 See non -confidential reply by TCGA to Questionnaire Q1 to competitors, questions 30 and 31.  
460  Form CO, paragraph 1345.  
 
124 (555)  [confidential information about AFKL ’s, Delta ’s and Virgin Atlantic ’s dry leasing 
activities ].461  
(556)  Flybe dry leases aircraft from third parties. […].462  
(557)  The Transaction does not give rise to a horizontally or vertically affected m arket.   
(558)  The Commission therefore considers that the Transaction does not raise serious 
doubts as to its compatibility with the internal market in the market for  the 
provision of  dry-leasing services  of large regional aircraft to other airlines . 
5.3 Wet-leasing  services to airlines  
(559)  Stobart Air (as a lessor) currently has wet -lease agreements with British Airways 
and AFKL  (as lessees) .463 [confidential information about  the aircraft leasing 
arrangements of  Stobart Air and Flybe ].  
(560)  The Parties explained that Flybe  was previously active as wet -lessor but has 
reduced its activities as a provider of wet -leasing services . [confidential 
information about  Flybe ’s commercial (wet-leasing) strategy ].464 [further 
confidential information about  Flybe ’s commercial (wet-leasing)  strategy ]. 
Therefore, the Commission considers that Flybe is not active as a provider of wet -
leasing services.  
(561)  [confidential information about  Virgin Atlantic ’s, Delta ’s and AFKL ’s wet-leasing 
activities ].465  
(562)  The Transaction does not give rise to a horizontally affected market in this respect, 
because the combined market shares post -Transaction on the market for the supply 
of wet -leasing services regarding large regional aircraft in the EEA would below 
[5-10]%.466 However, based on the above, the Transaction gives rise to a vertical 
link between Stobart Air as a lessor and Flybe, AFKL, Virgin Atlantic and Delta as 
(potential) wet -lessees, as regards the supply of wet -leasing services for large 
regional aircraft, w hich is the narrowest possible segment relevant for the 
Transaction.  
(563)  Since the market share in the upstream market for the supply of wet -leasing 
services of regional aircraft would be low ( [5-10]%), the Commission considers 
that the merged entity could not  restrict access to regional aircraft (input 
                                                 
461  Form CO, paragraph 1359.  
462  Form CO, paragraphs 1351 et seq.  
463  Form CO, paragraph 1361 et seq . 
464  Form CO, paragraph 1363 and 1387.  
465  Form CO, paragraphs 1368 et seq . 
466  Form CO, paragraphs 1371, 1383 et seq . and Annex E3. To apply a cautious approach, this is taking 
into account […]. If Flybe were considered as being active as a wet -lessor ( quod non ), the combined 
market share post -Transaction would be below [10-20]% […].  
 
125 foreclosure), as there are a large number of operators , for example CityJet or Adria 
Airways  that supply wet -leasing services of regional aircraft in the EEA.467 
Considering that numerous airlines , including major  carriers,  are wet -leasing 
regional aircraft  to provide air passenger transport services in the EEA , post -
Transaction, the merged entity also does not represent a significant customer base 
for wet -leasing of regional aircraft. As a result, there is no risk  that the merged 
entity will restrict access to downstream markets post -Transaction (customer 
foreclosure).  
(564)  This was confirmed by the market investigation. The majority of respondents to the 
market investigation having expressed an opinion stated that the Transaction would 
have no impact on the upstream market for the supply of wet -leasing services and 
no impact on the downstream demand for such services.  One respondent explained 
in this regard that “there are a significant number of airlines in the market both 
nationally and throughout the EEA competing in the same market, and so the 
market will be unaffected .”468 
(565)  The Commission therefore considers that the Transaction does not raise serious 
doubts as to its compatibility with the internal market due to vertical effects in the 
market for the provision of wet-leasing services of large regional aircraft to other 
airlines. 
5.4 Franchise services to a irlines  
(566)  The Transaction gives rise to a vertical link between Stobart Air, as a franchisee, in 
the upstream market for franchise services, and Flybe, as a franchisor  active in the 
downstream market for passenger air transport s ervices .469 As explained in Section 
4.6, franchising services are the operation of flight with the aircraft, crew and slots 
of the franchisee , who is also bearing the commercial risk,  under the brand of the 
franchisor who is also selling and distributing the  tickets.  Stobart Air has, as a 
franchisee, as already explained above, franchise agreements with Flybe and with 
Aer Lingus. Flybe has, as a franchisor , in addition to the franchise agreement with 
Stobart Air, franchise agreements with Blue Islands for rou tes within the UK 
connecting the Channel Islands and Southern England and with Eastern Airways 
focussing on routes linked to the oil and gas industries out of Aberdeen.  According 
to those franchising agreements, Blue Islands and Eastern Airways are franchi sees, 
Flybe is a franchisor.470  
(567)  Stobart Air’s market share in the upstream market for franchising services to other 
airlines in the EEA would be below 20% .471 The merged entity could not restrict 
                                                 
467  Form CO, Annex E3.  
468  Replies to eQ1 - Questionnaire to Airlines, question 46 and 47.  
469  Form CO, paragraph 1372 et seq . The Parties submitted that neither Virgin Atlantic nor AFKL or 
Delta are active in the market for the provision of franchise services to other airlines and do not act as 
franchisors in the EEA; Form CO, paragraph 1377.  
470  Form CO, paragraph 1375 and 1407.  
471  Form CO, paragraph 1392 and Annex E4.  
 
126 access to regional aircraft under franchising agreements (input  foreclosure) as there 
are a large number of operators that supply franchising services of regional aircraft, 
for example Air Nostrum  who has a market share of [40-50]% in the upstream 
market ,472 but also Blue Islands and Eastern Airways . Considering that other 
airlines than Flybe are purchasing franchise  services, for example Aer Lingus, post-
Transaction, the merged entity does not represent a significant customer base for 
franchising services of regional aircraft. As a result, there is n o risk that the merged 
entity will restrict access to downstream markets post -Transaction (customer 
foreclosure).  
(568)  The market investigation has been inconclusive as to whether other airlines 
consider that post-Transaction, Flybe would have the ability and t he incentive to 
stop purchasing franchise services from third -party airlines and as to whether post -
Transaction, Stobart Air would have the ability and the incentive to stop supplying 
franchise services to third -party airlines.473 However, the majority of airlines 
responding  to the market investigation and having expressed a view  stated that the 
Transaction would have no impact on the competitive situation on the markets for 
the provision of franchise  services to airlines .474  
(569)  The Commission therefore considers  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market due to vertical effects in the 
market for the provision of franchise  services to other airlines.  
5.5 Cargo air transport s ervices  
(570)  The Transaction gives rise t o a horizontal overlap because Flybe and AFKL are 
both providing intra -European air cargo transport.475  
(571)  The Commission has previously accepted to take into account in its assessment 
estimated market shares based on World Air Cargo Data ( “WACD ”) and the Carg o 
Accounts Settlement System ( “CASS ”). The Commission has also noted that 
CASS and/or WACD data do not reflect the entire air cargo markets, and therefore 
underestimated the total market size and overestimates the Parties’ market 
shares.476 The Parties have provided market shares based on WACD and CASS. 
Since Flybe would not subscribe to either WACD or CASS, the Parties have 
submitted Flybe’s market share s based on Flybe’s internal data.  
(572)  AFKL and Flybe’s combined market shares on the intra -European air cargo  
transport market are well below 10% in the last three years. The Transaction 
therefore does not give rise to  a horizontally affected market  and does not raise 
                                                 
472  Form CO, Annex E4.  
473  Replies to eQ1 – Questionnaire to Airlines, question 52 and 53.  
474  Replies to eQ1 – Questionnaire to Airlines, question 54.  
475  Form CO, paragraph 1 096. 
476  See e.g. Cases M.5440 – Lufthansa/Austrian Airlines , paragraph 283 and M.6447 – IAG/bmi , 
paragraph 555.  
 
127 serious doubts as to its compatibility with the internal market with respect to air 
cargo transp ort services under any plausible market definition.  
5.6 MRO s ervices   
(573)  Whilst the treatment of captive sales in market definition depends on the facts of 
the case, the Commission has previously accepted to exclude self -supply from the 
relevant market, and to as sess the impact of a concentration on the “merchant 
market ” (“third -party ” or “free” procurement market).477 For the purpose of this 
decision, the Commission will assess the impact of the Transaction on the merchant 
markets for MRO services  below . 
5.6.1 Horizontal  overlaps  
(574)  The Transaction gives rise to horizontal overlap s because Flybe and AFKL are both 
active with respect to the supply of heavy maintenance services in the EEA, while 
Flybe , AFKL  and Delta overlap in relation to the supply of heavy maintenance 
servi ces on a worldwide basis.  
(575)  The Parties have provided estimated market shares for the supply of heavy 
maintenance services at EEA -wide and global level.  In particular, in the last three 
years, the Parties’ combined market share in the market for the supply of heavy 
maintenance services did not exceed [0-5]% in the EEA478 or [0-5]% in the 
worldwide market.479 In addition, the Parties  confirm that their combined market 
shares would not exceed 20% under any plausib le market definition  for the supply 
of MRO services to third parties .480 
(576)  Moreover, the majority of respondents to the market investigation having expressed 
a view considered that  the Transaction would not have a negative impact on the 
markets for MRO service s in terms of prices or quality  of services.481 
(577)  The Transaction therefore does not give rise to a horizontally affected market and 
does not raise serious doubts as to its compatibility with the internal market due to 
horizontal effects with respect to MRO se rvices under any plausible market 
definition.  
5.6.2 Vertically affected markets  
(578)  The Transaction also gives rise to potential vertical relationships between the 
relevant carriers, since Flybe, AFKL, Delta and, to a more limited extent, Virgin 
Atlantic are all act ive in the upstream market for the provision of MRO services in 
                                                 
477 See for instance M.2002 – Preussag/Thompson , 26 July 2000, paragraph 11.  
478 Assuming that all of Flybe ’s revenue and AFKL ’s revenue was derived  in the EEA.  
479 Form CO, table 71.  
480 Reply to RFI 6.  
481 Replies to Questionnaire Q1 to Competitors, question 56.  
 
128 the EEA or worldwide. Delta, Virgin Atlantic482, AFKL, Flybe and Stobart Air are 
present in the downstream market  (for demand of MRO services)  in the EEA (or 
worldwide).  
(579)  The Parties have provide d estimated market shares for the upstream markets for the 
supply  and downstream markets for the acquisition of (i) line maintenance services 
for each relevant airport; (ii) heavy maintenance services at EEA -wide and 
worldwide levels; (iii) engine maintenance services (also as segmented by 
application; by engine type and by engine family) at EEA -wide and worldwide 
levels; and (iv) components maintenance services (also as segmented by aircraft 
type) at EEA -wide and worldwide levels.  Their combined ma rket shares  did not 
exceed 30% on any of these segments  in the last three years .483 In addition, the 
Parties confirm that their combined market shares would not exceed 30% under any 
plausible market definition for the supply (upstream) or acquisition  (downst ream) 
of any type of MRO services.484 
(580)  Moreover , the majority of  respondents to the market investigation having expressed 
a view considered that  the Transaction would not have a negative impact on the 
markets for MRO services  in terms of prices or quality  of services.485 
(581)  The Transaction therefore does not give rise to a vertically affected market and 
does not raise serious doubts as to its compatibility with the internal market due to 
vertical effects in the market for MRO services under any plausible market 
definition.  
5.6.3 Conclusion  
(582)  In light of the above considerations and all evidence available to it, the 
Commission concludes that the Transaction does not raise serious doubts as to its 
compatibility with the internal market with respect to the markets for MRO 
services, under any plausible market definition.  
5.7 Ground -handling s ervices  
(583)  Stobart Aviation Services is the specialised ground -handling business of Stobart 
Aviation. It provides ground -handling services at Stansted ( “STN ”) and Southend 
(“SEN ”) airports. It must  be noted that  Stobart Aviation Services falls outside the 
scope of the Transaction.  
No horizontal overlap  
                                                 
482 Form CO, paragraph 102: Virgin Atlantic is active in the MRO services market, but its business in the 
merchant market is very small. Virgin Atl antic offers line maintenance to third parties at just three 
locations around the world (JFK, JNB and LHR) and self -supplies at […] airports worldwide.  
483 Form CO, tables 68 -101.  
484 Reply to RFI 6.  
485 Replies to Questionnaire Q1 to Competitors, question 56.  
 
129 (584)  The Transaction does not give rise to any horizontal overlap because Flybe and 
Virgin Atlantic’s current and future shareholders do not provide grou nd-handling 
services in the UK.  
No vertically affected market  
(585)  The Transaction does not give rise to any vertically affected market between 
Stobart’s activities in the upstream market for ground -handling services and 
Flybe’s activities in the downstream ma rket for passenger air transport services.  
(586)  If the geographic market is defined as limited to the airport alone (i.e. STN “only” 
and SEN “only”), the Transaction would not give rise to vertical links because 
neither Flybe nor Virgin Atlantic (nor Virgin At lantic’s current and future 
shareholders) operate from STN or SEN.486  
(587)  If the geographic market is defined more broadly in order to include airports where 
Flybe operates (i.e. London(five) airports and London(six) airports),487 the 
Transaction would not give r ise to affected markets. First, Stobart’s market share 
on the upstream market for ground -handling services is below 30% under any 
plausible market definition.488 Second, Flybe’s and Virgin Atlantic’s (and its 
current and future shareholders’) market shares i n the downstream market for 
passenger air transport from the London(five) and London(six) airports are below 
30%.489  
Conclusion  
(588)  Therefore, the Transaction would not give rise to any vertically affected market and 
is unlikely to raise serious doubts as to it s compatibility with the internal market 
with respect to ground -handling services, under any plausible market definition.  
 
5.8 Airport infrastructure s ervices  
(589)  The Transaction does not give rise to any horizontal overlap in relation to the 
provision of airport  infrastructure services. However, the Transaction would give 
rise to vertical links between the upstream market for the provision of airport 
infrastructure services and the downstream market for the provision of passenger 
air transport services.  
                                                 
486  Form CO, paragraphs 1422 and 1423. For the sake of completeness, Stobart Air operates from SEN 
under a franchise agreement with Flybe. As discussed in Section 4.2.6 above, Sobart Air […]. 
Therefore, the link between Stobart Air and Stobart Aviation Serv ices is pre -existing and the 
Transaction does not give rise to a vertical link.  
487  London(five) airports are London Heathrow, London Gatwick, London City, Stansted and Luton 
airports. London(six) airports are London Heathrow, London Gatwick, London City, Stansted, Luton 
and Southend airports.  
488  Form CO, paragraphs 1422, 1425 et seq . 
489  Form Co, paragraph 1430.  
 
130 (590)  With res pect to Stobart’s activities in the provision of airport infrastructure services 
at Carlisle airport, the Commission notes that the airport is not yet operational and 
that neither Flybe nor any of the Parties (other than Stobart Air) has plans to 
provide p assenger air transport services to or from that airport.490 None of the 
respondents to the market investigation expressed concerns with respect to the 
effect of the Transaction on the provision of airport infrastructure services at 
Carlisle airport.491 The Tra nsaction is therefore unlikely to raise serious doubts as 
to its compatibility with the internal market with respect to airport infrastructure 
services at Carlisle airport.  
(591)  With respect to Stobart’s activities in the provision of airport infrastructure ser vices 
at SEN airport, the Transaction would not give rise to any vertically affected 
market. On the basis of a geographic market defined as “London six ” market 
comprising London Heathrow, London Gatwick, London City, London Luton, 
London Stansted and SEN airports, Stobart’s market share in the upstream market 
for airport infrastructure services would be below 30% and the merged entity’s 
combined market sh are in the provision of passenger air transport services to or 
from London six would be below 30%.492 If the geographic market is defined as 
SEN alone, the Transaction would not give rise to any vertical link, considering 
that non e of the Parties or Flybe  fly to or from SEN.493 None of the respondents to 
the market investigation expressed concerns with respect to the effect of the 
Transaction on the provision of airport infrastructure services at SEN airport.494 
The Transaction is therefore unlikely to raise seri ous doubts as to its compatibility 
with the internal market with respect to airport infrastructure services at SEN.  
(592)  With respect to Stobart’s activities in the provision of airport infrastructure services 
at Durham Tees Valley ( “DTVA ”) airport , the Transac tion seems unlikely to raise 
serious doubts as to its compatibility with the internal market under any plausible 
geographic market delineation for the following reasons.   
(593)  If DTVA, Leeds and Newcastle airports are considered as belonging to the same 
geograp hic market with respect to the provision of airport infrastructure services in 
the Tees Valley, the Transaction would not give rise to any affected market. 
Stobart’s market share in the upstream market would be [0-5]% while the merged 
entity’s combined mar ket share in the downstream market would be [5-10]%. 
Therefore, the Transaction would be unlikely to raise serious doubts.  
                                                 
490  Form CO, paragraph 1457.  
491  Replies to eQ1 – Questionnaire to Airlines, question 64.3.  
492  Form CO, paragraph 1454. The market shares for the acquisition of airport infrastructure services have 
been calculated by reference to passenger capacity, in terms of the number of seats available on an 
aircraft operating at each aircraft because passenger capacity provides a reasonable proxy for 
estimatin g market shares for airport infrastructure services, given that supply and demand of such 
services largely depends on the number of passengers expected to be catered for at an airport.  
493  Form CO, paragraph 1455.  
494  Replies to eQ1 – Questionnaire to Airl ines, question 64.2.  
 
131 (594)  If the geographic market is defined as comprising DTVA only, the Transaction 
would give rise to an affected market where Stobart woul d have a [90-100]% 
market share in the provision of airport infrastructure  services at DTVA, while 
Flybe and AFKL would have a combined market share of [90-100]% in the 
provision of passenger air transport services to and from this airport  […].495  
(595)  However, it is unlikely that any of the Parties would engage into an input or 
customer foreclosure in the predictable future. A customer foreclosure is unlikely, 
given that DTVA would be the only possible upstream provider. An input 
foreclosure also seems unlikely.  First, there is currently no other airlines at DTVA 
at risk of input foreclosure496 and none of the respondents to the market 
investigation has plan to enter the market for the provision of passenger air 
transport to or from DTVA.497 Furthermore, the Parties will have no incentive to 
engage in a foreclosure strategy. […].498 It is unlikely that any profit generated by 
the Parties as a result of a foreclosure strategy would outweigh the loss of profits 
from DTVA not serving other airlines or worsening its terms o f service. In 
addition, Stobart […] DTVA with Tees Val ley Combined Authority ( “TVCA ”), the 
majority shareholder  which is moreover a public entity . It is unlikely that TVCA  
will have an incentive allowing the implementation of an input foreclosure strategy, 
which would only benefit Stobart. Finally, none of the respondents to the market 
investigation expressed concerns with respect to the effect of the Transaction on the 
provision of airp ort infrastructure services at DTVA airport.499 
(596)  Therefore, the Transaction is unlikely to raise serious doubts as to its compatibility 
with the internal market with respect to vertical effects at DTVA airport.  
Conclusion  
(597)  In light of the above considerations and all evidence available to it, the 
Commission concludes that the Transaction does not raise serious doubts as to its 
compatibility with the internal market due to vertical effects in the market for the 
provision of airport infrastructure services, under  any plausible market definition.  
5.9 Conclusion  
(598)  For the reasons mentioned above, the Transaction raises serious doubts as to its 
compatibility with the internal market with respect to passenger air transport 
services on the two following routes: Birmingham -Amsterdam and Birmingham -
Paris . The Transaction does not raise serious doubts in respect of any other 
plausible relevant markets.  
                                                 
495  Form CO, paragraphs 1471 and 1473.  
496  Form CO, paragraph 1473.  
497  Replies to eQ1 – Questionnaire to Airlines, question 62.  
498 Form CO, paragraph 1473.  
499  Replies to eQ1 – Questionnaire to Airlines, question 64.1.  
 
132 6. THE PROPOSED COMMITMENTS  
6.1 Description  
(599)  In order to address the serious doubts raised by the Transaction on the 
Birmingham -Amsterdam and Birmingham -Paris routes, the Parties submitted 
commitments on 14 June 2019.500 On the same date , the Commission – whilst it 
expressed some doubts  as to whether the commitments would foster sufficient, 
timely, and likely entries on th e these routes  – launched a market test in order to 
gather the opinion of market participants. Following the  feedback from the market 
participants , the Parties submitted an improved version of the commitments on 3 
July 2019 (the “Commitments ”).501 As will be shown below, these Commitments 
are suitable to entirely remove the serious doubts identified by the Commission.  
(600)  The Commitments aim at reducing the barriers to entry and facilitating entry for 
prospective entrant(s)502 on the Birmingham -Amsterdam  and Birmingham -Paris  
routes. Specifically, they provide for the release and transfer of a number of 
Connect Airways slots at Amsterdam Schiphol and Paris Charles de Gaulle  
airports . 
(601)  The main aspects of the Commitments are summarised below.  
6.1.1 Slot release on  city pairs with competition concerns  
(602)  At the outset, it is worth mentioning that Amsterdam Schiphol and Paris CDG are 
(heavily) congested airports where slots are a scarce resource. Under the 
Commitments, Connect Airways  would procure that slots are made a vailable at 
Amsterdam Schiphol and Paris CDG in order to allow one or more prospective 
entrant(s) to operate or increase their services on the following city pairs: (i) 
Birmingham -Amsterdam ( “BHX -AMS ”) and (ii) Birmingham -Paris ( “BHX -PAR ”) 
(together the “Relevant Routes ”). 
(603)  The number of slots to be made available would enable prospective entrant(s) to 
operate up to a total of five slot pairs  per day on the BHX -AMS route and up to a 
total of three  slot pairs  per day on the BHX -PAR route.503 
                                                 
500 A draft set of commitments was submitted on 11 June 2019 and discussed with the Commission on 12 
June 2019. The version formally lodged on 14 June 2019 incorporates some comments made by the 
Commission relating to the number of slots offered and certain c onditions.  
501 A draft set of commitments was submitted on 27 June 2019 and discussed with the Commission on 27 
June 2019. The version formally lodged on 3 July 2019 incorporates some comments made by the 
Commission.  
502 Defined in the Commitments as “ Any Appl icant that is not a Controlling entity of Connect Airways or 
affiliated with Connect Airways, able to offer a Competitive Air Service individually or collectively by 
codeshare and needing a Slot or Slots to be made available by Connect Airways in accordanc e with 
the Commitments in order to operate a Competitive Air Service .” 
503 As opposed to the initial version, the final version of the Commitments does not provide for a capacity 
limitation mechanism, which allowed for the daily frequencies to be reduced in case the prospective 
entrant intended to operate with any aircraft of 100 seats or more.  
 
133 6.1.2 Conditions pertaining to the slots  
(604)  A prospective entrant shall be eligible to obtain s lots from Connect Airways 
pursuant to these Commitments only if it can demonstrate that it has exhausted all 
reasonable efforts to obtain the necessary slots to operate on the Relev ant Routes  
through the normal workings of the general slot allocation procedure. The 
prospective entrant shall be deemed not to have exhausted all reasonable efforts to 
obtain necessary slots if: (a) slots at the relevant airport (i.e. AMS or CDG) were 
available through the general slot allocation procedure within +/ - 20 minutes of the 
times requested but such slots have not been accepted by the prospective  entrant; or 
(b) slots at the relevant airport (i.e. AMS or CDG, for use to operate a competitive 
air service on the Relevant Routes)  were obtained through the general slot 
allocation procedure more than 20 minutes from the times requested  and the 
prospective entrant did not give Connect Airways the  opportunity to exchange 
those s lots for slots within  +/- 20 minutes of the times requested ; or (c) it has not 
exhausted its own slot portfolio at the AMS or CDG.  
(605)  Slots shall be released  within +/- 20 minutes of the time requested if Connect 
Airways  has such slots available . In the event that Connect Airways does not have 
such slots available , it shall offer to release the slots closest in time to the request.  
(606)  Connect Airways does not have to offer slots  if the slots which the prospective 
entrant could have obtained through  the general slot allocation procedure are closer 
in time to the request than the slots which Connect Airways has  available .  
(607)  In addition, the slots released by Connect Airways should be spread evenly 
throughout the day, i.e. with respect to AMS no more th an two (2) arrival/departure 
slots in the morning (the period up until 12:00 local time), no more than two (2) 
arrival/departure slots in the afternoon (the period after 12:00 and up until 16:00 
local time), and no more than two (2) arrival/departure slots  in the evening (the 
period after 16:00 local time), and with respect to CDG no more than one (1) 
arrival/departure slot in the morning (the period up until 12:00 local time), no more 
than one (1) arrival/departure slot in the afternoon (the period after 1 2:00 and up 
until 16:00 local time), and no more than one (1) arrival/departure slot in the 
evening (the period after 16:00 local time).504 
6.1.3 Grandfathering rights   
(608)  As a general rule, the slots obtained by a prospective entrant must be operated on 
the city pai r(s) for which they have been requested from Connect Airways and 
cannot be used on another city pair unless the prospective entrant has operated 
them during at least six full consecutive IATA seasons (the “Utilisation Period ”). 
The prospective entrant woul d be deemed to have grandfathering rights for the slots 
once appropriate use of the slots has been made on the city pairs at issue for the 
Utilisation Period. Once the Utilisation Period has elapsed, the prospective entrant 
                                                 
504 As opposed to the initial version, the final version of the Commitments does not provide for the time 
band restrictions.  
 
134 will be entitled to use the slo ts obtained on the basis of the  Commitments to operate 
services on any route connecting Paris or Amsterdam .505 
(609)  During the Utilisation Period  the prospective entrant shall not be entitled to 
transfer, assign, sell, swap or charge in breach of the Commitm ents a ny slots 
obtained from Connect Airways  under the Commitments  (except for  (i) changes to 
any such slots which are within the 20 minutes time window and which have been 
agreed with the slot coordinator  and (ii) any slots between 12:00 and 16:00 (local 
time) which can be swapped provided this has been agreed with the slot 
coordinator ). Provisions on misuse of slots also apply. In the event of a misuse, the 
prospective entrant shall have fifteen  days after such notice to cure the misuse, 
failure to which gives Connect Airways the right to terminate the agreement and 
obtain restitution of the slots . 
6.1.4 Consideration  
(610)  To the extent that the slots released under the Commitments are at an airport where 
secondary trading takes place ,506 the agreement with the prospective entrant may , 
as an option,  provide for monetary and/or other consideration, so long as such 
contractual provisions are voluntarily agreed, clearly disclosed to the Monitoring 
Trustee and comply with the Commitments and all other administrative 
requirements  set out in the applicable legislation.507 
6.1.5 Other provisions  
6.1.5.1  Fare combinability  
(611)  Connect Airways also committed to enter, at the request of an airline which started 
to operate new or increased services on any of the Relevant Routes  concerned by 
the slot commit ments (whether or not such service uses slots released to that airline  
pursuant to the Commitments), an agreement that arrang es for fare combinability 
on that Relevant Route . This agreement provides for the possibility for the airline 
concerned, or travel agents, to offer a return trip on the Relevant Route  comprising 
a non -stop service provided one way by Connect Airways  and a non -stop service 
provided the other way by the airline at issue.  
6.1.5.2  Frequent flyer programmes  
(612)  Should Connect Airways become part of a frequent flyer program ( “FFP”), at the 
request of an airline wishing to operate new or increased services on any of the 
routes concerned by the slot commitments that does not have a comparable FFP of 
                                                 
505 As opposed to the initial version, the fin al version of the Commitments does not provide for a 
restriction of the grandfathering rights to use of slots on European short -haul routes only.  
506 The Commission understands that secondary trading is not allowed at AMS and CDG at the time of the 
decision.  Therefore, this provision would become relevant only if the relevant airports would become 
airports where secondary trading is allowed.  
507 For the sake of clarity, the consideration referred to in this paragraph does not preclude Connect 
Airways from reque sting reasonable compensation as provided in the Slot Release Agreement in case 
of Misuse.  
 
135 its own, Connect Airways shall request for the relevant airline to be hosted in the 
same FFP as Connect Airways for the Relevant Route(s) on which the relevant 
airline has commenced or increased service. Where the FFP provider agrees to host 
the relevant airline, Connect Airways shall use its reasonable endeavo rs for the FFP 
agreement with the relevant airline to be on terms such that the relevant airline 
shall have equal treatment vis -à-vis the accrual and redemption of Miles on the 
Relevant Route as compared with Connect Airways for as long as the relevant 
airline operates a non -stop service on the Relevant Route.  
6.1.5.3  Monitoring Trustee  
(613)  A Monitoring Trustee will be appointed by Connect Airways  to monitor the correct 
execution of the Commitments, subject to previous approval by the Commission. 
The Monitoring Trustee  will be independent of Connect Airways  (including its 
controlling entities and affiliated undertakings) and must be familiar with the 
airline industry and the slot allocation and exchange procedures . Connect Airways  
shall provide the Monitoring Trustee wi th such assistance and information, 
including copies of all relevant documents, as the Monitoring Trustee may 
reasonably require in carrying out its mandate. In particular, the Monitoring 
Trustee would have access to Connect Airways’  books, records, docume nts, 
management or other personnel facilities, sites and technical information necessary 
to fulfil its duties under the Commitments.  
6.1.5.4  Fast track dispute resolution  
(614)  The Commitments also contain provisions on fast -track dispute resolution 
according to which t he new entrant can decide to settle any dispute with Connect 
Airways  through arbitration. In the event of disagreement between the parties to the 
arbitration regarding the interpretation of the Commitments the arbitral tribunal 
may seek the Commission ’s interpretation and shall be bound by that 
interpretation. Both the parties to the arbitration will then be bound by the decision 
of the arbitral tribunal.  
6.1.6 Sunset clause  
(615)  The Commitments provide for a “sunset clause ”, which states that the obligation on 
Connect Airways to procure that slots are made available at the relevant airports 
(i.e. AMS and CDG) is limited in time and shall apply for 20 full consecutive  
IATA Seasons  (starting from and including Summer 2020) . If there are no slot 
release agreements in force at the end of this period, then the Commitments will 
expire. This provision, however, does not affect the validity of the slot release 
agreements, fare combinability agreements and FFP agreements already concl uded 
and in operation , or the grandfathering rights already obtained (or in the process of 
being obtained) at the time the sunset cl ause would apply.  
6.2 Assessment of the proposed Commitments   
(616)  As set out in the Commission Notice on Remedies508, the Commission a ssesses the 
compatibility of a notified concentration with the internal market on the basis of its 
                                                 
508 Commission notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under 
Commission regulation (EC) No 802/2004, OJ C 267, 22.10.2008, p. 1.  
 
136 effect on the structure of competition in the European Union. Where a 
concentration raises serious doubts which could lead to a significant impediment to 
effective competition, the Parties may seek to modify the concentration so as to 
resolve the serious doubts identified by the Commission with a view to having the 
concentration cleared.  
(617)  According to the European Union Courts ’ case law, commitments must be lik ely to 
eliminate all competition concerns identified and ensure competitive market 
structures. The Commission enjoys a broad discretion in assessing whether 
commitments offered before the initiation of proceedings constitute a direct and 
sufficient respons e capable of dispelling any serious doubts about the proposed 
merger.  
(618)  In assessing whether or not the commitments will maintain effective competition, 
the Commission considers inter alia the type, scale and scope of the remedies 
offered by reference to the  structure and the particular characteristics of the market 
in which the Commission ’s serious doubts as to the compatibility of the 
Transaction with the internal market arise. It should be emphasised, however, that 
commitments offered prior to the initiati on of proceedings can only be accepted 
when the competition problem that the concentration gives rise to is readily 
identifiable and can easily be remedied.  
(619)  For the reasons set out below and on the basis of the available evidence, the 
Commission ’s assessm ent concludes  that the Commitm ents address the serious 
doubts identified in this Decision. As such, the Commission concludes  that the 
Commitments offered by the Parties  are sufficient to eliminate any serious doubts 
as to the compatibility of the Transacti on with the internal market.  
6.2.1 Structure and design of the Commitments  
(620)  In airline cases, slot release commitments are acceptable to the Commission where 
it is sufficiently clear that actual entry by new competitors that would eliminate any 
significant impedi ment to effective competition will occur. For such commitments 
to be acceptable, the notifying party need not identify a precise new entrant if 
competitors express an interest during the administrative procedure in entering the 
markets concerned in view of  the proposed commitments.  
(621)  The Commitments relating to slots are based on the fact that the severel y limited 
slot availability at Amsterdam and Paris CDG  is an important entry barrier on the 
routes where competition concerns have been identified. Therefore, the 
Commitments are designed to remove (or at least reduce significantly) this barrier 
and foster sufficient, timely, and likely entries  on the Relevan t Routes.  
(622)  It is important to note that, given the significant level of congestion at AMS and 
CDG , slots are intrinsically attractive. In addition, the Commitments make entry 
more interesting due to the prospect of acquiring grandfathering rights after six 
IATA seasons.  
6.2.2 Outcome of the market test  
(623)  Following the feedback from  the market test with respect to the initial 
commitments provided by the Parties on 14 June 2019, the revised Commitments 
provided on 3 July  2019 address the shortcomings of the initial c ommitments a s 
 
137 identified in particular in the market test. Namely, the Commitments, as opposed to 
the initial version, are no longer restricted with respect to (i) the timing of the slots 
offered ( i.e. hour bands  no longer imposed ), (ii) the frequencies o f the slots offered  
(i.e. no  capacity limitation mechanism  anymore ) or (iii) the grandfathering rights 
(i.e. six (6) IATA Seasons required to obtain grandfathering instead of eight (8) 
IATA Seasons, and no longer limited to intra -European flights only).  
(624)  The total number of five daily frequencies offered for the BHX -AMS  route and 
three daily frequencies for the BHX -PAR  route  was considered sufficient by a 
majority of all respondents to the market test  expressing an opinion .509  
(625)  During the market test, potentia l interest was expressed in the initial commitments 
subject to the abovementioned restrictions with regard to timing, frequencies and 
grandfathering rights being removed. Following the feedback from the market test 
and discussions with the Commission, the Parties submitted the  revised  
Commitments, which no lon ger feature these restrictions.510 
(626)  A majority of all respondents expressing an opinion also thought that , in addition to 
grandfathering,  each of the fare combinability commitment and frequent flyer 
progr amme commitment  on the Relevant Routes  increases the likelihood that entry 
will take place on both the BHX -AMS and BHX -PAR routes.511  
(627)  In addition, a majority of all respondents expressing an opinion also considered that 
each of the monitoring system and the fast -track dispute resolution system 
proposed in the Commitments is appropriate to ensure the effective implementation 
of the Commitments .512 With regard to the duration of the slot commitments, 
considering its purpose, the market test indicated that  10 years (i.e. 20 IATA 
Seasons) would be a reasonable maximum duration.513 
6.2.3 Conclusion on the Commitments  
(628)  According to the European Union Courts ’ case law, commitments must be likely to 
eliminate competition concerns identified and ensure competitive market 
structures. In particular, contrary to those entered into during the Phase II 
procedure, commitments offered in Phase I (i.e. before the initiation of 
proceedings) are intended not to prevent a significant impediment to effective 
competition  but rather to clearly dispel all serious doubts in that regard. The 
                                                 
509 See Replies to Questionnaire Q2 to other market participants, question 1. Replies to Questionnaire Q1 
to competitors were inconclusive.  
510 See Replies to Questionnaire Q1 to competitors, question 8.  
511 See Replies to Questionnaire Q1 to competitors, questions 11 -12; and Replies to  Questionnaire Q2 to 
other market participants, questions 10 -11. 
512 See Replies to Questionnaire Q1 to competitors, questions 13 -13.2; and Replies to Questionnaire Q2 to 
other m arket participants, questions 12 -12.2.  
513 See Reply to Questionnaire Q1 to competitors, question 8.  
 
138 Commission enjoys a broad discretion in assessing whether these remedies 
constitute a direct and sufficient response capable o f dispelling any such doubts.514  
(629)  Concerning the suitability of commitments ai ming at facilitating entry of a new 
competitor, the Commission Notice on Remedies states that “[o]ften, a sufficient 
reduction of entry barriers is not achieved by individual measures, but by […] a 
commitments package aimed at overall facilitating entry of  competitors by a whole 
range of different measures ”. 
(630)  In airline cases, commitments are acceptable to the Commission where it is 
sufficiently likely that actual entry by new competitors will occur and where such 
entry would eliminate any serious doubts as to the compatibility of the 
concentration with the internal market. In this respect, account must be taken of the 
facts existing at the time when the decision is adopted and not in the light of 
subsequent events.515 
(631)  The Commission considers that the Commitme nts constitute a comprehensive 
package which takes into consideration past experience with commitments in 
merger cases in the aviation sector.  
(632)  Amsterdam  Schiphol  is one of the most congested airport s in Europe.  Paris CDG is 
also a very congested airport.  Consequently , slots at AMS and CDG  are highly 
valuable, therefore rendering the slot Commitments very appealing for prospective 
new entrants.  
(633)  Indeed, it is extremely unlikely that , absent the Commitments,  any prospective new 
entrant could obtain all the s lots necessary to operate the above -mentioned routes 
to/from Amsterdam Schiphol or Paris CDG  with a sufficient number of frequencies 
from the first IATA season. In addition , the slot allocation mechanism in the 
Commitments ensures that the prospective new entrant will in all probability 
receive the requested slots in a window of +/ -20 minutes  of the requested times .  
(634)  The limitation concerning the need to spread released slots throughout the day does 
not change t he picture material ly. In addition, to the ext ent that the slots released 
under the Commitments would be  at an airport where secondary trading takes 
place,516 the possibility for airline s to pay a considerat ion for the slots offered by 
Connect Airways  does not reduce the attractiveness of the slots or p reclude their 
award to the best applicants. Indeed, the above is not an obligation, but rather an 
option that airline s may use in order to have a chance to obtain the slots in the 
                                                 
514 Case T -177/04 easyJet v Commission [2006] ECR II -1931, para 128 ff.  
515 Cf. point 63 of the Commission Notice on Remedies, and Case T -177/04 easyJet v Commis sion [2006] 
ECR II -1931, para 197 ff. Point 63, footnote (4), of the Commission Notice on Remedies state that, in 
air transport mergers, a mere reduction of barriers to entry by a commitment of the parties to offer slots 
on specific airports may not always  be sufficient to ensure the entry of new competitors on those 
routes where competition problems arise and to render the remedy equivalent in its effects to a 
divestiture.  
516 The Commission understands that secondary trading is not allowed at AMS and CDG at the time of the 
decision. Therefore, this provision would become relevant only if the relevant airports would become 
airports where secondary trading is allowed.  
 
139 event that, following the Commission’s evaluation, several applicants are de emed 
to provide similarly effective competitive c onstraints on services from/to AMS or 
CDG . 
(635)  In light of the above, and on the basis of the information available to the 
Commission, in particular considering the  potential  interest demonstrated during 
the mar ket test , it is concluded that the Commitments  will likely lead to entry by 
one or more airlines on AMS -BHX and AMS -CDG  in a timely manner, and that 
this entry is of a sufficient magnitude to dispel the serious doubts identified on 
these markets .  
(636)  For the reasons outlined above, the Commitments entered into by the Parties  are 
considered  sufficient to eliminate the serious doubts as to the compatibility of the 
transaction with the internal market.  
(637)  Under the first sentence of the second subparagraph of Article 6(2) of the Merger 
Regulation, the Commission may attach to its decision conditions and obligations 
intended to ensure that the undertakings concerned comply with the commitments 
they have ente red into vis -à-vis the Commission with a view to rendering the 
concentration compatible with the internal market.  
(638)  The achievement of the measure that gives rise to the structural change of the 
market is a condition, whereas the implementing steps which ar e necessary to 
achieve this result are generally obligations on the Parties. Where a condition is not 
fulfilled, the Commission’s decision declaring the concentration compatible with 
the internal market no longer stands. Where the undertakings concerned co mmit a 
breach of an obligation, the Commission may revoke the clearance decision in 
accordance with Article 8(6) of the Merger Regulation. The undertakings 
concerned may also be subject to fines and periodic penalty payments under 
Articles 14(2) and 15(1) of the Merger Regulation.  
(639)  The commitments in s ections 1, 2 and 3  of the Commitments submitted by the 
Parties on 3 July  2019  constitute conditions  attached to this Decision , as only 
through full compliance therewith  can the structural changes in the relevant 
markets be achieved . The other sections in the Commitments constitute obligations, 
as they concern the implementing steps which are necessary to achieve the 
modifications sought in a manner compatible with the in ternal market.  
  
 
140  
7. CONCLUSION   
(640)  For the above reasons, the Commission has decided not to oppose the notified 
operation as modified by the commitments and to declare it compatible with the 
internal market and with the functioning of the EEA Agreement, subject to  full 
compliance with the conditions and obligations laid down in the Commitments 
annexed to the present decision. This decision is adopted in application of Article 
6(1)(b) in conjunction with Article 6(2) of the Merger Regulation and Article 57 of 
the EE A Agreement.  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
________________  
 
 
 
1 
  
CASE  COMP/M.9287  – CONNECT  AIRWAYS/  FLYBE  
COMMITMENTS  TO THE  EUROPEAN  COMMISSION  
Pursuant to Article 6(2) of Council Regulation (EC) No. 139/2004 as amended (the 
“Merger Regulation ”), the shareholders of Connect Airways Ltd ( “Connect Airways ”) 
hereby provide the following commitments (the “Commitments ”) in order to enable th e 
European Commission (the “Commission ”) to declare the proposed acquisition by 
Connect Airways of Flybe Group plc and its subsidiaries ( “Flybe ”) (the “Notified 
Concentration ”) compatible with the internal market and the EEA Agreement by its 
decision pursu ant to Article 6(1)(b) of the Merger Regulation (the “Decision ”). 
 
The Commitments shall take effect upon the date of adoption of the Decision.  
 
This text shall be interpreted in the light of the Decision to the extent that the 
Commitments are attached as conditions and obligations, in the general framework of EU 
law, in particular in the light of the Merger Regulation, and by reference to the 
Commission Notice on remedies acceptable under Council Regulation (EC) No. 139/2004 
and under Commission Regulation  (EC) No. 802/2004.  
  
 
2 
 A. Definitions  
 
For the purpose of the Commitments, the following terms shall have the following meanings:  
 
Affiliated 
Undertakings  
 Undertakings controlled by Connect Airways or by the ultimate 
parents of Connect Airways, whereby the notion of control 
shall be interpreted pursuant to Article 3 of the Merger 
Regulation and in the light of the Commission’s Consolidated 
Jurisdictional Notice under Council Regulation (EC) No. 
802/2004.  
Airport Catchment 
Area  In respect of AMS, this ar ea includes Lelystad Airport.  
In respect of CDG, this area includes ORY and BVA.  
In respect of BHX, this area includes EMA.  
AMS  Amsterdam Schiphol Airport.  
AMS Remedy 
Frequencies  This term has the meaning given in Clause 1.1.1(a) . 
Applicant  Any airline interested in obtaining Slots from Connect Airways 
in accordance with these Commitments.  
BHX  Birmingham Airport.  
BHX -AMS City Pair  Flights between BHX and either AMS or Lelystad.  
BHX -PAR City Pair  Flights between BHX and either CDG, ORY or BVA.  
BVA  Paris Beauvais Tillé Airport.  
CDG  Paris Charles de Gaulle Airport.  
Commitment(s)  The Slot commitment for each Relevant City Pair and/or, as  
relevant, the commitment relating to Frequent Flyer 
Programmes and/or, as relevant, the commitment relating to 
fare combinability.  
Competitive Air 
Service  A non -stop scheduled passenger air transport service operated 
on the BHX -AMS City Pair an d/or the BHX -PAR City Pair.  
Connect Airways  Connect Airways Ltd.  
Controlling Entity(ies)  
 The entities which, together, own the entire share capital of 
Connect Airways which are DLP, Stobart, and Virgin Atlantic 
(through its wholly owned subsidiary Virgi n Travel Group 
Limited).  
Cyrus  Cyrus Capital Partners L.P.  
DLP  DLP Holdings S.à.r.l. a company wholly owned and managed 
by Cyrus Capital Partners L.P.  
Effective Date  The date of adoption of the Decision.  
Eligible Air Services An airline that is not an associated carrier belonging to the 
 
3 
 Provider  same corporate group as Connect Airways or affiliated with 
Connect Airways and which operates a new or increased 
Competitive Air Service on a Relevant City Pair.  
European Short -haul 
City Pair( s) Any route connecting a Relevant Airport with any other part of 
Europe, which, for the avoidance of doubt, shall include the UK 
and thus the Relevant City Pairs.  
EU Slot Regulation  Council Regulation (EEC) No 95/93 of 18 January 1993 on 
common rules for  the allocation of slots at EU airports (OJ L 14 
of 22.01.1993), as amended.  
Fast-Track Dispute 
Resolution Procedure  This term has the meaning given in Clause 5. 
Frequency(ies)  A round -trip on a Relevant City Pair.  
Frequent Flyer 
Programme (or FFP)  A programme offered by an airline to reward customer loyalty  
under which members of the programme accrue points for 
travel onthat airline which can be redeemed for free air travel 
and otherproducts or services, as well as allowing other benefits 
such as  airport lounge access or priority bookings.  
 
General Slot Allocation 
Procedure   
The Slot allocation  procedure as set out in the EU Slot 
Regulation and IATA Worldwide Scheduling Guidelines 
(including participation at the IATA Scheduling Conference to 
try to improve slots and allocation by the slot coordinator from 
the waitlist following the Slot Handback  Deadline).  
Grandfathering  This term has the meaning given in Clause 1.3.2 . 
IATA  The International Air Transport Association.  
IATA Scheduling 
Conference  The industry conference of airlines and airport coordinators 
worldwide to solve scheduling issues where there are 
discrepancies between the slots requested by the airlines and 
allocated by the airport coordinators. The IATA scheduling 
conference  for the Winter Season takes place in June, and the 
one for the Summer Season in November.  
IATA Season  The IATA Summer Season begins on the last Sunday of March 
and ends on the Saturday before the last Sunday of October. 
The IATA Winter Season begins on t he last Sunday of October 
and ends on the Saturday before the last Sunday of March.  
ICC International Chamber of Commerce.  
Identified Time Period  The period prior to 12:00 (local time) and the period after 16:00 
(local time).  
Key Terms  The following terms that shall be included in the Applicant’s 
formal bid for Slots: timing of the requested Slot(s), number of 
frequencies and IATA Seasons to be operated (year -round 
 
4 
 service or seasonal).  
Material Increase in 
Capacity  Permitted capacity (including perm itted movements) increase 
of 5% or more per year.  
Misuse  This term has the meaning given in Clause 1.4.2 . 
MITA  Multilateral Interline Traffic Agreements Manual published by 
IATA.  
Monitoring Trustee  An individual or institution, independent of Connect Airways, 
who is approved by the Commission and appointed by Connect 
Airways and who has the duty to monitor Connect Airways’ 
compliance with the c onditions and obligations attached to the 
Commitment Decision.  
New Air Services 
Provider  An airline that is not an associated carrier belonging to the 
same corporate group as Connect Airways or affiliated with any 
member of Connect Airways and which commences a new non -
stop service on a Relevant City Pair or which increases the 
number of non -stop Frequencies it operates on a Relevant City 
Pair in accordance with these Commitments.  
ORY  Paris Orly Airport.  
PAR Remedy 
Frequencies  This term has the mean ing given in Clause 1.1.1(b) .  
Published Fares  Fares published by Connect in ATPCo in reservation booking 
designator (or selling classes):  
 
 Y and J for European Short -haul City Pairs  
Prospective Entrant  Any air carrier interested in obtaining Slots from Connect 
Airways in accordance with these Commitments and which 
complies with the following requirements:  
 it must be independent of and unconnected with 
Connect Airways.  For the purpose of these 
Commitments, an airline shall not be deemed to be 
independent of and unconnected to Connect Airways 
when, in particular:  
o it is an associated carrier belonging to the same 
corporate group as Connect Airways;  or 
o it co -operates with Connect Airways on the 
Relevant City Pair concerned in the provision of 
passenger air transport services, except if this co -
operation is limited to agreements concerning 
servicing, deliveries, lounge usage or other 
secondary activities  entered into on an arm’s 
length  basis;  
 it must have the intention and be able to start or increase 
a Competitive Air Service on one or more of the 
Relevant City Pairs individually or collectively by 
 
5 
 codeshare;  
 to that effect, it needs a Slot or several Sl ots for the 
operation of a Competitive Air Service.  
Q/YQ/YR  
Surcharge  Charges paid in addition to the base fare amount of a ticket 
which are allocated to the Q, YQ or YR IATA ticket coding 
and which are used in particular to recover fuel, insurance 
and/or  security charges.  
Relevant Airport(s)  AMS and/or CDG.  
Relevant City Pair(s)  This term has the meaning given in Clause 1.2.2 . 
Requesting Party  This term has the meaning given in Clause 5.1.2 . 
SAL  Slot Allocation List.  
Slot Handback 
Deadline  15 January for the IATA Summer Season and 15 August for the 
IATA Winter Season.  
Slot Release 
Agreement  An agreement between Connect Airways and a Prospective 
Entrant that provides for the exchange of Slot(s) with the 
Prospective Entrant according to the principles laid down in 
Clause 1 of these Commitments. For the avoidance of doubt, (i) 
the Slot Release Agreement shall abide by the EU Slot 
Regulation and any exchange pursuant to this agreement shall 
be confirmed by the slot coordinator and (ii) the duration of the 
Slot Release Agreeme nt shall be unlimited in time, subject to 
its termination provisions.  
Slot Release Procedure  This term has the meaning given in Clause 1.2.1.  
Slot Request 
Submission Deadline  The final date for the request for Slots to the slot coordinator as 
set out in  the IATA Worldwide Scheduling Guidelines.  
Slot(s)  The permission to land and take -off in order to operate an air 
service at the airport on a specific date and time given in 
accordance with the EU Slot Regulation.  
Stobart  Stobart Aviation Limited, being a wholly owned subsidiary of 
Stobart Group Limited.  
Sunset Date  The last day of IATA Winter Season 2029/2030.  
TFEU  The Treaty on the Functioning of the European Union.  
Time Window  The period of time either side of the Slot time requested by the 
Prospect ive Entrant and shall be +/ - twenty (20) minutes for 
Relevant City Pairs.  
Utilisation Period  This term has the meaning given in Clause 1.3.1 and shall  
be six (6) consecutive IATA Seasons   
(e.g. Summer/Winter/Summer/Winter/Summer/Winter for 
routes operate d on a year -round basis or a continuous series of 
six (6) Summer or Winter Seasons for the routes which are 
 
6 
 operated on a seasonal basis).  
Virgin Atlantic  Virgin Atlantic Limited.  
 
1 
 1. SLOTS  
1.1 SLOTS AT RELEVANT AIRPORTS  
1.1.1 Subject to Clause 7, Connect Airways undertakes to procure that Slots 
are made available at Relevant Airports to allow one or more Prospective 
Entrant(s) to operate or increase the following number of new or 
additional Frequencies on the following city pairs:  
(a) up to (5) five Frequencie s per day in total on the BHX -AMS City Pair 
(the “AMS Remedy Frequencies ”); and  
(b) up to (3) three Frequencies per day in total on the BHX -PAR City  Pair 
(the “PAR Remedy Frequencies ”).  
1.2 CONDITIONS PERTAINING  TO SLOTS  
1.2.1 Each Prospective Entrant shall comply with  the following procedure to obtain 
Slots from Connect Airways ( “Slot Release  Procedure ”). 
1.2.2 The Prospective Entrant wishing to commence/increase a Competitive Air 
Service on one or more of the city pairs covered by Clause  1.1.1  (“Relevant City 
Pair(s) ”) shall:  
(a) apply to the slot coordinator for the necessary Slots through the General 
Slot Allocation Procedure;  and 
(b) notify its request for Slots to the Monitoring Trustee, within the period 
foreseen in Clause 1.5.1 . 
1.2.3 The Prospective Ent rant shall be eligible to obtain Slots from Connect Airways 
pursuant to these Commitments only if it can demonstrate that it has exhausted all 
reasonable efforts to obtain the necessary Slots to operate on the Relevant City 
Pairs through the normal working s of the General Slot Allocation Procedure.  
1.2.4 For the avoidance of doubt, the Prospective entrant remains solely responsible to 
negotiate and enter into any agreement with the Relevant Airports for the 
provision of airport and terminal related services.  
1.2.5 For the purposes of this Clause 1.2, the Prospective Entrant shall be deemed not 
to have exhausted all reasonable efforts to obtain necessary Slots  if: 
(a) Slots at the Relevant Airport were available through the General Slot 
Allocation Procedure within the Time Window but such Slots have not 
been accepted by the Prospective Entrant;  or 
(b) Slots at the Relevant Airport (for use to operate a Competitive Air 
Service on the Relevant City Pair) were obtained through the General 
Slot Allocation Procedure  outside the  Time  Window  and the Prospective  
Entrant  did not give Connect Airways the opportunity to exchange those 
Slots for Slots within the Time Window;  or 
(c) it has not exhausted its own Slot portfolio at the Relevant Airport . For 
these purposes, the Prospective Entrant will be deemed not to have 
exhausted its own Slot  portfolio:  
 
2 
 (i) if the Prospective Entrant has Slots at the Relevant Airport within 
the Time Window which are being leased -out to or exchanged 
with other carriers (unless that lease or exchange was concluded 
before the Effective Date or the carrier can provide reasonable 
evidence satisfying the Commission (following consultation with 
the Monitoring Trustee) that there are bona fide reasons for this 
being done rather than it being a pretext to enable the Prospecti ve 
Entrant to present itself as needing Slots to operate a Competitive 
Air Service on a Relevant City Pair);  or 
(ii) if the Prospective Entrant has Slots at the Relevant Airport which 
are outside the Time Window and which are leased -out to other 
carriers, in wh ich case the Prospective Entrant shall be entitled to 
apply for Slots from Connect Airways, but only  if: 
 that lease was concluded before the Effective Date;  or 
 it can provide reasonable evidence satisfying the 
Commission (following consultation with the Monitoring 
Trustee) that there are bona fide reasons for leasing the 
Slot out in this way rather than using it itself;  or 
 it gives Connect Airways an option to become the lessee 
of the leased -out Slot at the earliest possible time 
allowed under the applica ble lease (on terms 
substantially the same as that lease and for a duration that 
runs in parallel with the Slot Release Agreement). If the 
Slot Release Agreement with the Prospective Entrant 
does not provide for monetary compensation, then the 
lease to Con nect Airways will likewise not provide for 
monetary  compensation.  
For the purposes of Clause 1.2.5 (c) (i) and (ii), the bona fide reasons 
for leasing out (or, as relevant, exchanging) Slots by the Prospective 
Entrant shall include, but shall not be limited to, a situation where the 
Prospect ive Entrant can provide clear evidence of an intention to 
operate those Slots on a specific route and clear and substantiated 
evidence of the reasons that currently prevent it from doing so.  
1.2.6 If the Prospective Entrant obtains Slots through the General Slot  Allocation 
Procedure but after the IATA Scheduling  Conference:  
(a) which are within the Time Window;  or 
(b) which (in the case of Slots obtained at both ends of the route) are not 
compatible with the planned flight duration of the Prospective Entrant ’s 
operation on the route,  
the Prospective Entrant shall remain eligible to obtain Slots from Connect 
Airways through the Slot Release Procedure provided that it gives an option to 
Connect Airways to use the Slots obtained through the General Slot Allocation 
Procedure on terms substantially the same as the terms of the Slot Release 
Agreement, and for a duration that runs in parallel with the Slot Release 
Agreement (provided that such use by Connect Airways is compatible with 
Article 8a(3) of the EU Slot Regulation).  
 
3 
 1.2.7 Without prejudice to these Commitments (and, particularly, of this Clause 1), 
Connect Airways shall not be obliged to honour any agreement to make available 
the Slots to the Prospective Entrant  if: 
(a) the Prospective Entrant has not exhausted all reasonable effo rts in the 
General Slot Allocation Procedure to obtain the necessary Slots to 
operate a new or increased service on the Relevant City Pair;  or 
(b) the Prospective Entrant has been found to be in a situation of Misuse (as 
described in Clause 1.4.2  below).  
1.2.8 Subject to Clause 1.5.11 , Connect Airways under takes to make available Slots 
within the Time Window (if it has such Slots). In the event that Connect Airways 
does not have Slots within the Time Window, Connect Airways shall offer to 
release the Slots closest in time to the Prospective Entrant’s request . Connect 
Airways does not have to offer Slots if the Slots which the Prospective Entrant 
could have obtained through the General Slot Allocation Procedure are closer in 
time to the Prospective Entrant’s request than the Slots that Connect Airways has. 
The arrival and departure Slot times shall be such as to allow for reasonable 
aircraft rotation to the extent possible, taking into account the Prospective 
Entrant ’s business model and aircraft utilisation  constraints.  
1.3 GRANDFATHERING OF SLOTS  
1.3.1 As a general rule, the Slots obtained by the Prospective Entrant from Connect 
Airways as a result of the Slot Release Procedure shall be used only to provide a 
Competitive Air Service on the Relevant City Pair for which the Slots were 
requested. These Slots cannot be u sed on another city pair unless the Prospective 
Entrant has operated a Competitive Air Service on the Relevant City Pair for 
which these Slots have been made available for a number of full consecutive 
IATA Seasons ( “Utilisation  Period ”). For the avoidance of doubt, a Utilisation 
Period may extend beyond the Sunset Date.  
1.3.2 The Prospective Entrant will be deemed to have grandfathering rights for the 
Slots once appropriate use of the Slots has been made on the Relevant City Pair 
for the Utilisation Period. In th is regard, once the Utilisation Period has elapsed, 
the Prospective Entrant will be entitled to use the Slots obtained on the basis of 
these Commitments on any city pair to/from the Relevant Airport 
(“Grandfathering ”). 
1.3.3 Grandfathering is subject to approval  of the Commission, advised by the 
Monitoring Trustee, in accordance with Clause 1.5.  
1.4 LIMITATIONS ON USE OF  SLOTS  
1.4.1 During the Utilisation Period, the  Prospective Entrant shall not be entitled to 
transfer, assign, sell, swap or charge in breach of these Commitments any Slots 
obtained from Connect Airways under the Slot Release Procedure, except for (i) 
changes to any such Slots which are within the Time  Window and which have 
been agreed with the slot  coordinator, and (ii) any Slots which are outside the 
Identified Time Period which can be swapped provided this has been agreed with 
the slot coordinator.  
 
4 
 1.4.2 During the Utilisation Period, Misuse shall be deem ed to arise where a 
Prospective Entrant which has obtained Slots released by Connect Airways  
decides:  
(a) not to commence services on the Relevant City  Pair(s);  
(b) to cease operating on a Relevant City Pair(s) or to operate the 
Frequencies on a Relevant City Pair(s) at a utilisation rate lower than 
proposed in the bid, submitted in accordance with Clause 1.5.7 , unless 
such a decision is consistent with the “use it or lose it ” principle in 
Article 10(2) of the EU Slot Regulation (or any suspension  thereof);  
(c) to transfer, assign, sell, swap, sublease or charge any S lot released by 
Connect Airways on the basis of the Slot Release Procedure, except for 
(i) changes to the Slot which are within the Time Window and which 
have been agreed with the slot coordinator, and (ii) any Slots which are 
outside the Identified Time P eriod which can be swapped provided this 
has been agreed with the slot coordinator;  
(d) not to use the Slots on a Relevant City Pair(s), as proposed in the bid, 
submitted in accordance with Clause 1.5.7 ;  
(e) not to use the Slots properly: this situation shall be deemed to exist where 
the Prospective Entrant (i) loses the series of Slots at a Relevant Airport 
as a consequence of the principle of “use it or los e it” in Article 10(2) of 
the EU Slot Regulation ; or (ii) misuses the Slots at a Relevant Airport as 
described and interpreted in Article 14(4) of the EU Slot  Regulation.  
1.4.3 If Connect Airways or the Prospective Entrant which has obtained Slots under the 
Slot Release Procedure becomes aware of or reasonably foresees any Misuse by 
the Prospective Entrant during the Utilisation Period, it shall immediately inform 
the other and the Monitoring Trustee. The Prospective Entrant shall have (15) 
fifteen calendar days after such notice to cure the actual or potential Misuse.  
(a) If the Misuse is not cured, Connect Airways shall have the right to 
terminate the Slot Release Agreement and the Slots shall be returned to 
Connect Airways. In cases (a) and (b) of Clause 1.4.2 , Connect Airways 
shall then use its reasonable best efforts to redeploy the Slots in order to 
safeguard the historic precedence. If despite its reasonable best efforts, 
Connect Airways is not able to retain the historic precedence for these 
Slots, or in cas e of a Misuse as defined in cases (c), (d) or (e) of Clause 
1.4.2 , the Prospective Entrant shall provide reasonable compensation to 
Connect Airways as  provided for in the Slot Release  Agreement.  
(b) If the Misuse is cured within the (15) fifteen calendar day period, 
Connect Airways shall not have the right to terminate the Slot Release 
Agreement and the Prospective Entrant can continue to use the Remedy 
Slots. 
(c) For the avoidance of doubt, the occurrence of Misuse during the 
Utilisation Period resets the count of the Utilisation Period to zero in 
cases (a) and (b) of Clause 1.4.2 . 
1.4.4 For the avoidance of doubt, the Slot Release Agreement  may:  
 
5 
 (a) contain prohibitions on the Prospective Entrant transferring its rights to 
the Slots (except for swaps pursuant to Clause 1.4.2(c) (ii)) to a third 
party, making the Slots available in any way to a third party for the use of 
that third party, or releasing, surrendering, giving up or otherwise 
disposing of any rights to  the Slots;  and/or  
(b) provide for reasonable compensation to Connect Airways in case of 
Misuse during the Utilisation Period; and/or  
If for any reason (including, but without limitation, the insolvency of the 
Prospective Entrant) Connect Airways is unable to receive reasonable 
compensation for the Slots being either lost or not returned within 
sufficient time for Connect Airways to preserve its grandfathering rights, 
such Slots shall be counted against the maximum number of Slots to be 
released in accordance w ith the Commitments.  
(c) may contain a re -application procedure in case a change of control of the 
Prospective Entrant occurs.  
1.4.5 In view of the Commission ’s Communication of 30 April 2008 on the EU Slot 
Regulation, which stated that: “The text of the current [EU Slot] Regulation is 
silent on the question of exchanges with monetary and other consideration ” and 
that the Commission would therefore “not intend to pursue infringement 
proceedings against Member States where such exchanges take place in a 
transparent  manner, respecting all the other administrative requirements for the 
allocation of slots set out in the applicable legislation ”, and to the extent that the 
Slots released under the Slot Release Procedure are at an airport where secondary 
trading takes pla ce, the Slot Release Agreement with the Prospective Entrant  may 
provide  for monetary  and/or  other  consideration,  so long as such Slot Release 
Agreement provisions are clearly disclosed to the Monitoring Trustee and comply 
with these Commitments and all oth er administrative requirements set out in the 
applicable legislation.  
1.4.6 The Slot Release Agreement shall provide that the Prospective Entrant will be 
able to terminate the agreement at the end of each IATA Season without penalty, 
provided the Prospective Entrant notifies the termination of the agreement to 
Connect Airways in writing no later than two (2) weeks after the IATA 
Scheduling  Conference.  
1.5 SELECTION PROCEDURE , ROLE OF MONITORING TRUSTEE AND APPROVAL BY 
COMMISSION  
1.5.1 At least seven (7) weeks before the  Slot Request Submission Deadline, any airline 
wishing to obtain Slots from Connect Airways pursuant to the Slot Release 
Procedure  shall:  
(a) inform the Monitoring Trustee of its proposed Slot request (indicating the 
arrival and departure times);  
(b) submit to th e Monitoring Trustee the list of its leased out or exchanged 
Slots at the Relevant Airport for which it is applying for Slots, along with 
the date at which the leases or exchanges were concluded. The 
Monitoring Trustee or the Commission may also request ad ditional 
 
6 
 information from the Applicant to enable assessment of its eligibility 
pursuant to Clause 1.2.5  and Clause  1.5.4 ; and  
(c) indicate to the Monitoring Trustee if it has any confidentiality concerns 
which would justify keeping its identity anonymous vis -à-vis Conn ect 
Airways, in which case it must provide a reasoned explanation of those 
concerns together with its request for anonymity. In the event that such a 
request is made, the Monitoring Trustee shall:  
(i) immediately inform the Commission of that  request,  
(ii) within o ne (1) week of that request advise the Commission 
whether or not that request should be granted, and  
(iii) within three (3) weeks of the request, in consultation with the 
Commission, determine whether or not the Applicant’s Slot 
request may be treated anonymousl y (and, if so, to what extent, 
subject to what conditions and for what period).  
1.5.2 At least six (6) weeks before the Slot Request Submission Deadline, the 
Monitoring Trustee shall forward the Slot request to Connect Airways and the 
Commission. Until the begin ning of the IATA Scheduling Conference, the 
Monitoring Trustee shall not disclose to Connect Airways the Relevant City Pair 
for which the Slot is requested. Once informed of the Slot request, Connect 
Airways may discuss with the Applicant the timing of the  Slots to be released and 
the types of compensation which could be offered. Connect Airways shall copy 
the Monitoring Trustee on all correspondence between it and the Applicant which 
relates to the Slot Release  Procedure.  Connect Airways  shall  not share  any 
information  about  such discussions  with other Applicants and may require the 
Applicant not to share any such information with other Applicants. At least six (6) 
weeks before the Slot Request Submission Deadline, the Monitoring Trustee shall 
also inform t he manager of the Relevant Airport for which the slot request is 
made and the slot coordinator of the Slot request and, subject to the Applicant’s 
consent, disclose to them any relevant information regarding the Slot request. The 
Monitoring Trustee shall a sk the manager of the Relevant Airport for which the 
slot request is made and the slot coordinator to inform it of any likely 
impediments to the satisfaction of the request, in particular due to the availability 
of terminal facilities and  infrastructure.  
1.5.3 If the Applicant has made a request for anonymity in accordance with Clause 
1.5.1(c) , the Monitoring Trustee shall not disclose to Connect Airways the 
identity of the Applicant for so long as that request is pending or has been 
granted. In such a case, the procedure set down in this Clause 1.5.3  shall apply, 
save that, until the beginning of the IATA Scheduling Conference, any 
communication or correspondence between Connect Airways and the Applicant 
shall go through the Monitoring Tru stee, who shall ensure the protection of the 
anonymity of the  Applicant.  
1.5.4 After being informed of the Slot request in accordance with Clause 1.5.2 , the  
Commission (advised by the Monitoring Trustee) shall assess whether the 
Applicant meets the following  criteria:  
(a) the Applicant is independent of and unconnected to Connect Airways and 
its Controlling Entity(ies);  and 
 
7 
 (b) the Applicant has exhausted its own Slo t portfolio at  the Relevant Airport 
for which the slot request is made.  
If the Commission decides that the Applicant does not fulfil the above criteria, 
the Commission shall inform the Applicant and Connect Airways of that 
decision at least two (2) weeks b efore the Slot Request Submission Deadline.  
1.5.5 At least one (1) week before the Slot Request Submission Deadline, Connect 
Airways shall indicate to the Monitoring Trustee and each Applicant which Slots 
at each Relevant Airport they would release, if necessary , during the Time  
Window.  
1.5.6 By the Slot Request Submission Deadline, each Applicant shall send its request 
for Slots (at the same time(s) as those requested through the Slot Release 
Procedure) to the slot coordinator in accordance with the General Slot Alloc ation  
Procedure.  
1.5.7 By the Slot Request Submission Deadline, each Applicant shall also submit its 
formal bid for the Slots to the Monitoring Trustee. The formal bid shall include at  
least:  
(a) the Key Terms (i.e. timing of the Slots, number of frequencies to be 
operated on a year -round  service or on a seasonal basis, number of IATA 
Seasons to be operated); and  
(b) a detailed business plan. This plan shall contain a general presentation of 
the company including its history, its legal status, the list and a 
description  of its shareholders and the two most recent yearly audited 
financial reports.  The detailed business plan shall provide information on 
the plans that the company has in terms of access to capital, development 
of its network, fleet etc. and detailed informa tion on its plans for the 
Relevant City Pair(s) on which it wants to operate. The latter should 
specify in detail planned operations on the Relevant City Pair(s) over a 
period of at least two (2) consecutive lATA Seasons (size of aircrafts, seat 
configurat ion, total capacity and capacity by each class, number of 
frequencies operated, pricing structure, service offerings, planned time -
schedule of the flights) and expected financial results (expected traffic, 
revenues, profits, average fare by cabin class). T he Monitoring Trustee 
and/or the Commission may also request any additional information and 
documents from the Applicant required for their assessment, including a 
copy of all cooperation agreements the Applicant may have with other 
airlines. Business secr ets and confidential information will be kept 
confidential by the Commission and the Monitoring Trustee and will not 
become accessible Connect Airways, other undertakings or the  public; and  
(c) a corporate statement (e.g. a Board approval) confirming that the 
Prospective Entrant has the intention and is able to start or offer a 
Competitive Air Service on one or more of the Relevant City Pairs.  
1.5.8 In parallel, if an Applicant is offering compensation for the Slot(s) it has 
requested pursuant to these Commitments, i t will send Connect Airways, copying 
the Monitoring Trustee, a detailed description of the compensation which it is 
willing to offer in exchange for the release of the Slots for which it has submitted 
 
8 
 bids. Within three (3) weeks, Connect Airways shall pro vide the Monitoring 
Trustee with a ranking of these  offers.  
1.5.9 Having received the formal bid(s), the Commission (advised by the Monitoring 
Trustee)  shall:  
(a) assess whether each Applicant, is a viable existing or potential 
competitor, with the ability, resource s and commitment to operate 
services on the Relevant City Pair(s) in the long term as a viable and 
active competitive  force;  
(b) evaluate the formal bids of each Applicant, that meets (a) above, and 
rank these Applicants in order of  preference.  
1.5.10 In conducting i ts evaluation in accordance with Clause 1.5.9 , the Commission 
shall give preference to the Applicant (or combination of Applicants) which will 
provide  the most effective overall competitive constraint on each of the Relevant 
City Pairs, without regard to the country in which the Applicant(s) is licensed or 
has its principal place of business. For these purposes, the Commission shall take 
into account th e strength of the Applicant ’s business plan and in particular give 
preference to Applicants meeting one or more of the following  criteria:  
(a) the largest capacity (as measured in seats offered on services for two (2) 
relevant consecutive IATA Seasons (e.g. Summer/Winter or a continuous 
series of two (2) Summer or Winter IATA Seasons for a seasonal 
Competitive Air Service)) from/to the Relevant Airport on Relevant City 
Pairs;  
(b) a pricing structure and service offerings that would provide the most 
effective comp etitive constraint on the Relevant City Pair(s);  and 
(c) plans to offer feed to third party carriers operating services from the 
Relevant Airport.  
1.5.11 The Commission (advised by the Monitoring Trustee) shall also ensure that the up 
to (5) five arrival and departur e Slots at AMS and the up to (3) three arrival and 
departure Slots at CDG to be made available under Clause 1.1.1  are spread evenly 
throughout the day  i.e. with respect to AMS no more than two (2) 
arrival/departure Slots in the morning (the period up until 12:00 local time), no 
more than two (2) arrival/departure Slots in the afternoon (the period after 12:00 
and up until 16:00 local time), and no more than two (2) arrival/departure Slots in 
the evening (the period after 16:00 local time), and with respect to CDG no more 
than one (1) arrival/departure Slot in the morning (the period up until 12:00 local 
time), no more than one (1) arrival/departure Slot in the afternoon (the period 
after 12:00 and up until 16:00 local time), and no more than one (1) 
arrival/departure Slot in the evening (the period after 16:00 local time).  
1.5.12 In advance of the beginning of the lATA Scheduling Conference, the Monitoring 
Trust ee shall inform each Applicant (if the latter did not receive slots within the 
Time Window as indicated through the SAL) and the slot  coordinator:  
(a) whether the Applicant qualifies for the Slots Commitment;  and 
(b) the Applicant’s  ranking.  
 
9 
 1.5.13 In any case, the Appli cant shall attend the lATA Scheduling Conference and try to 
improve its Slots. Following confirmation of the Commission’s approval pursuant 
to Clause 1.5.9 , the Applicants and Connect Airways shall be deemed to have 
agreed the Key Terms of the Slot Release Agreement, as well as any 
compensation which was offered by the Applicant to Connect Airways under 
Clause 1.5.8 . The Key Terms may only be changed after such date by mutual 
agreement between the Applicant and Connect Airways if the Monitoring Trustee 
confirms that the changes are not material or if the Commission (advised by the 
Monitoring Trustee) approves the  changes.  
1.5.14 Within two (2) weeks of the end of the lATA Scheduling Conference, each 
Applicant shall inform the Monitoring Trustee and Connect Airways whether it 
will commit to operate the Slot s offered eventually by Connect Airways in case it 
has not obtained them through the General Slot Allocation Procedure.  
1.5.15 Within three (3) weeks of the end of the lATA Scheduling Conference, the 
Monitoring Trustee shall confirm to the highest ranked Applican t(s) that has 
provided the confirmation in accordance with Clause 1.5.12  that it is entitled to 
receive Slots from Connect Airways. Connect Airways s hall offer the dedicated 
Slots for release to such Applicant. The Slot Release Agreement shall be subject 
to review by the Monitoring Trustee and approval of the Commission. Unless 
both Connect Airways and the relevant Applicant agree to an extension and 
subject to Clause 1.2.6 , the Slot Release Agreement shall be signed and the Slot 
release completed within six (6) weeks after the lATA Scheduling Conf erence, 
and the slot coordinator shall be informed of the Slot exchange in order to obtain 
the required confirmation.  
 
2. FARE  COMBINABILITY  
2.1 At the request of an Eligible Air Services Provider which, after the Effective Date 
and before the Sunset Date, has started to operate new or increased Competitive 
Air Service on a Relevant City Pair (whether or not such service uses Slots 
released to that carrier pursuant to these Commitments), Connect Airways shall 
enter into an agreement that arranges for fare combin ability on that Relevant City 
Pair. This agreement will provide for the possibility for the Eligible Air Services 
Provider, or travel agents, to offer a return trip on the Relevant City Pair 
comprising a non -stop service provided one way by Connect Airways  and a non -
stop service provided the other way by the Eligible Air Services Provider. At the 
request of the Eligible Air Services Provider, the agreement shall apply in relation 
to all of the Eligible Air Services Provider’s services on the Relevant City  Pair. 
For the avoidance of doubt, Connect Airways shall not be obliged to enter into an 
agreement with an Eligible Air Services Provider that arranges for fare 
combinability on that Relevant City Pair, if Connect Airways/Flybe has ceased 
operating services on that Relevant City Pair and any such agreement shall 
automatically lapse in the event that Connect Airways/Flybe ceases to operate all 
services on that Relevant City  Pair. 
2.2 Any such agreement shall be subject to the following  restrictions:  
(a) it shall provi de for fare combinability on the basis of Connect 
Airways/Flybe’s Published Fares. Where this provides for a published 
round -trip fare, the fare can be comprised of half the round -trip fare of 
Connect Airways/Flybe and half the round -trip fare of the Eligi ble Air 
 
10 
 Services  Provider;  
( b) it shall provide for the appropriate division or recovery of any 
applicable Q/YQ/YR  Surcharges;  
(c) it shall be limited to true origin and destination traffic on the Relevant 
City Pair operated by the Eligible Air Services Provider;  and 
( d) it shall be subject to the MITA  rules.  
2.3 Subject to Clause 2.7, any term included in the agreement (for example  interline 
service charge, number of booking classes included) can never be less favourable 
than the corresponding term in any fare combinability agreement which Connect 
Airways/Flybe and the Eligible Air Services Provider have in place as at the 
Effective  Date.  
2.4 Subject to seat availability in the relevant fare category, Connect Airways shall 
carry a pass enger holding a coupon issued by an Eligible Air Services Provider 
for travel on a Relevant City Pair. Connect Airways may require that the Eligible 
Air Services Provider or the passenger, where appropriate, pay the (positive) 
difference between the fare c harged by Connect Airways and the fare charged by 
the Eligible Air Services Provider if Connect Airways was not the original 
ticketed carrier on the Relevant City Pair. In cases where the Eligible Air Services 
Provider’s fare is lower than the value of the  coupon issued by it, Connect 
Airways may endorse its coupon  only up to the value  of the fare charged  by the 
Eligible  Air Services  Provider. An Eligible Air Services Provider shall enjoy the 
same protection in cases where Connect Airways ’ fare is lower than the value of 
the coupon issued by  it. 
2.5 A fare combinability agreement entered into pursuant to this Clause 2 for a 
particular Relevant City Pair shall have an effective duration of up to five (5) 
years at t he choice of the Eligible Air Services Provider, or if it elects to have a 
shorter initial duration than that to which it is entitled pursuant to this Clause 2.5, 
the Eligible Air Services Provider shall have a right to renew  the agreement on an 
evergreen basis for further periods of one (1) year (i.e. rolled over on the same 
terms) as long as these Commitments are in force, provided it exercises its right 
of extension by informing Connect Airways/Flybe in writing no later tha n thirty 
(30) days before the expiry of the agreement. The Eligible Air Services Provider 
also has a right to terminate the agreement, at any time during the initial term or 
the extensions, upon thirty (30) days written  notice.  
2.6 All agreements entered into pursuant to this Clause 2 for a particular Relevant 
City Pair shall lapse automatically in the event that the Eligible Air Services 
Provider ceases to operate the new or increased service on that Relevant City  Pair. 
2.7 The concl usion of the fare combinability agreement shall be subject to the 
approval of the Commission, as advised by the Monitoring Trustee, in particular 
as to whether its terms are  reasonable.  
  
 
11 
 3. FREQUENT FLYER  PROGRAMMES  
3.1 Subject to Clause 7, should Connect Airways become part of a FFP, at the request 
of a New Air Services Provider that does not have a comparable FFP of its own, 
Connect Airways shall request for the New Air Services Provider to be hosted in 
the same FFP as Connect Airways for the Relevant City Pair(s) on which the New 
Air Services Provider has commenced or increased service.  
3.2 Where the FFP provider agrees to host the New Air Services Provider, Connect 
Airways shall use its reasonable endeavors for the FFP agreement with the New 
Air Services Provider to be on terms such that the New Air Services Provider 
shall have equal treatment vis -à-vis the accrual and redemption of Mil es on the 
particular Relevant City Pair as compared with Connect Airways for as long as 
the New Air Services Provider operates a non -stop service on that Relevant City 
Pair. 
3.3 The conclusion of the FFP agreement with the New Air Services Provider shall be 
subject to the approval of the Commission, as advised by the Monitoring Trustee, 
in particular as to whether its terms are reasonable.  
 
4. MONITORING  TRUSTEE  
4.1 APPOINTMENT OF MONITORING  TRUSTEE  
4.1.1 A Monitoring Trustee shall be appointed by Connect Airways on the t erms and in 
accordance with the procedure described below and, once approved by the 
Commission, shall perform the functions of monitoring Connect Airways’ 
fulfilment of the Commitments and further obligations that may be contained in 
the Commitment Decisio n. 
4.1.2 The Monitoring Trustee shall be independent of Connect Airways, its Controlling 
Entities, and its Affiliated Undertakings and must be familiar with the airline 
industry and the slot allocation and exchange procedures, and have the experience 
and compete nce necessary for this appointment (e.g. investment bank, consultant 
specialised in the air transport sector, or auditor). In addition, it shall not be 
exposed to any conflict of interest and shall not have had any direct or indirect 
work, consulting or ot her relationship with the shareholders of Connect Airways 
in the last three (3) years and shall not have a similar relationship with Connect 
Airways for three (3) years after completing its mandate. For the avoidance of 
doubt, the performance of the role o f monitoring trustee in other Commission 
proceedings, including the performance of the role of monitoring trustee for 
Connect Airways, shall not be an obstacle to the appointment as Monitoring 
Trustee.  
4.1.3 Connect Airways shall ensure that the Monitoring Trust ee’s remuneration shall be 
sufficient to guarantee the effective and independent compliance of its mandate. 
Connect Airways will only be required to remunerate the Monitoring Trustee for 
costs and expenses reasonably incurred in the performance of its mand ate.  
4.1.4 Connect Airways shall use reasonable endeavours to, within two (2) weeks of the 
Effective Date, submit to the Commission for approval a list of one or more 
 
12 
 persons whom Connect Airways considers adequate to fulfil the duties of the 
Monitoring Trustee . The proposal shall contain sufficient information for the 
Commission to verify that the proposed Monitoring Trustee fulfils the 
requirements set out above and shall  include:  
(a) the full terms of the proposed mandate, which shall include all provisions 
neces sary to enable the Monitoring Trustee to fulfil its duties under these 
Commitments; and  
(b) the outline of a work plan which describes how the Monitoring Trustee 
intends to carry out the tasks assigned to  it. 
4.1.5 The Commission shall have the discretion to approve  or reject the proposed 
Monitoring Trustee and to approve the proposed mandate subject to any 
modifications it deems necessary for the Monitoring Trustee to fulfil its 
obligations. If only one name is approved, Connect Airways shall appoint the 
individual or institution concerned as Monitoring Trustee. If more than one name 
is approved by the Commission, Connect Airways shall be free to choose the 
Trustee to be appointed from among the names approved. The Monitoring Trustee 
should be appointed within one (1 ) week of the Commission’s approval, in 
accordance with the mandate approved by the Commission.  
4.1.6 If all the proposed Monitoring Trustees are rejected by the Commission, Connect 
Airways shall submit the names of at least two more individuals or institutions 
within one (1) week of being formally informed of the rejection by the 
Commission.  
4.1.7 If all further proposed Monitoring Trustees are rejected by the Commission, the 
Commission shall nominate at least two candidates for the position of Monitoring 
Trustee and Connect Airways shall appoint one of these candidates in accordance 
with the mandate approved by the  Commission.  
4.2 MONITORING TRUSTEE’S MANDATE  
4.2.1 The Monitoring Trustee’s mandate shall include, in particular, the following 
obligations and  responsibilities:  
(a) to monitor the satisfactory discharge by Connect Airways of the 
obligations entered into in these Commitments in so far as they fall 
within the scope of these Commitments;  
(b) to propose to Connect Airways such measures as the Monitoring Trustee 
considers necessa ry to ensure Connect Airways’ compliance with the 
conditions and obligations attached to the Decision;  
(c) to advise and make a written recommendation to the Commission as to 
the suitability of any Slot Release Agreement or Prospective Entrant 
submitted for ap proval to the Commission under Clause  1; 
(d) to provide written reports to the Commission on Connect Airways’ 
compliance wit h these Commitments and the progress of the discharge of 
its mandate, identifying any respects in which Connect Airways has 
failed to comply with these Commitments or the Monitoring Trustee has 
been unable to discharge its mandate;  
 
13 
 (e) to mediate in any disagr eements relating to any Slot Release Agreement, 
if mediation is agreed to by the other party or parties to the agreement in 
question, and submit a report upon the outcome of the mediation to the 
Commission; and  
(f) at any time, to provide to the Commission, at  its request, a written or oral 
report on matters falling within the scope of these  Commitments.  
4.2.2 For the avoidance of doubt, subject to Clause 4.2.1 , there is no requirement for 
the Monitoring Trustee to be involved in the commercial negotiations between 
Connect Airways and a third party carrier entering into any of the agreements 
under the Commitments. Any such agreements however remain subject to the  
Commission’s  approval.  
4.2.3 Any request made by a third party carrier for the Monitoring Trustee to verify 
Connect Airways’ compliance with these Commitments must be reasonable. In 
particular, the Monitoring Trustee must refuse to conduct such a verification 
where the third party carrier fails to produce any evidence of a suspected breach 
of the Commitments and/or appears to be making a vexatious  request.  
4.2.4 Connect Airways shall receive simultaneously a non -confidential version of any 
recommendation made by the Monitoring Trustee to the Commission (as provided 
for in Clause 4.2.1(c) ). 
4.2.5 The reports provided for in Clauses 4.2.1(c)  to 4.2.1(f)  shall be prepared in 
English. The reports provided for in Clause 4.2.1(d)  shall be sent by the 
Monitoring Trustee to the Commission within ten (10) working days from the end 
of every IATA Season following the Monitoring Trustee’s appointment or at such 
other time(s) a s the Commission may specify and shall cover developments in the 
immediately preceding lATA Season. Connect Airways shall receive 
simultaneously a non -confidential copy of each Monitoring Trustee  report.  
4.2.6 Connect Airways shall provide the Monitoring Trustee  with such assistance and 
information, including copies of all relevant documents, as the Monitoring 
Trustee may reasonably require in carrying out its mandate. Connect Airways 
shall pay reasonable remuneration for the services of the Monitoring Trustee as  
agreed in the  mandate.  
4.2.7 The Monitoring Trustee shall have access to Connect Airways’ books, records, 
documents, management or other personnel facilities, sites and technical 
information necessary to fulfil its duties under these  Commitments.  
4.2.8 At Connect Airways’ expense, the Monitoring Trustee may appoint advisors, 
subject to the Commission’s prior approval, if the Monitoring Trustee reasonably 
considers the appointment of such advisors necessary for the performance of its 
duties under the mandate, provid ed that any fees incurred are reasonable and 
Connect Airways has been consulted on the appointment and has approved the 
amount of the fees.  
4.3 TERMINATION OF MANDATE  
4.3.1 If the Monitoring Trustee ceases to perform its functions under the Commitments 
or for any ot her good cause, including but not limited to the exposure of the 
Monitoring Trustee to a conflict of  interest:  
 
14 
 (a) the Commission may, after hearing the Monitoring Trustee, require 
Connect Airways to replace the Monitoring Trustee; or  
(b) Connect Airways may repla ce the Monitoring Trustee.  
4.3.2 If the Monitoring Trustee is removed, it may be required to continue its functions 
until a new Monitoring Trustee is in place to whom the Monitoring Trustee has 
effected a full hand -over of all relevant information. The new Monit oring Trustee 
shall be appointed in accordance with the procedure referred to in Clause  4.1.1 . 
4.3.3 Aside from being remove d in accordance with Clause 4.3.1  the Monitoring 
Trustee shall cease to act as Monitoring Trustee only after the Commission has 
discharged it from its  duties. However, the Commission may at any time require 
the reappointment of the Monitoring Trustee if it subsequently appears that the 
Commitments have not been fully and properly  implemented.  
4.3.4 The Monitoring Trustee will be discharged from its duties if the entire 
Commitments expire in accordance with Clause 7.1.4.  
 
5. FAST -TRACK  DISPUTE  RESOLUTION  PROCEDURE  
5.1.1 The agreements concluded to implement the Commitments in accordance with 
Clause  1 shall provide for the Fast -Track Dispute Resolution procedure (the 
“Fast- Track Dispute Resolution Procedure ”) described in this Clause 5 in the 
event that a Prospective Entrant has reason to believe that Connect Airways is 
failing to comply with the requirements of the Commitments vis -à-vis that party, 
this Fast -Track Dispute R esolution Procedure will  apply.  
5.1.2 Any Prospective Entrant which wishes to avail itself of the Fast -Track Dispute 
Resolution Procedure (the “Requesting Party ”) shall send a written request to 
Connect Airways (with a copy to the Monitoring Trustee) setting out  in detail the 
reasons leading that party to believe that Connect Airways is failing to comply 
with the requirements of the Commitments (the “Request ”). The Requesting 
Party and Connect Airways will use their best efforts to resolve all differences of 
opinion and settle all disputes that may arise through cooperation and consultation 
within a reasonable period of time not to exceed fifteen (15) working days after 
receipt of the Request.  
5.1.3 The Monitoring Trustee shall present its own proposal (the “Trustee Pro posal ”) 
for resolving the dispute within eight (8) working days, specifying in writing the 
action, if any, to be taken by Connect Airways in order to ensure compliance with 
the Commitments vis -à-vis the Requesting Party, and be prepared, if requested, to 
facilitate the settlement of the dispute.  
5.1.4 Should the Requesting Party and Connect Airways fail to resolve their differences 
of opinion through cooperation and consultation as provided for in Clause 5.1.2  
the Requesting Party may serve a notice (the “Notice ”), in the sense of a request 
for arbitration, to the International Chamber of Commerce (the “ICC”) (the 
“Arbitral Insti tution ”), with a copy of such a Notice and request for arbitration 
to Connect Airways.  
 
15 
 5.1.5 The Notice shall set out in detail the dispute, difference or claim (the “Dispute ”) 
and shall contain, inter alia, all issues of both fact and law, including any 
suggestions as to the procedure, and all documents relied upon shall be attached, 
e.g. documents, agreements, expert reports, and witness statements. The Notice 
shall also contain a detailed description of the action to be undertaken by Connect 
Airways (in cluding, if appropriate, a draft contract comprising all relevant terms 
and conditions) and the Trustee Proposal, including a comment as to its 
appropriateness.  
5.1.6 Connect Airways shall, within ten (10) working days from receipt of the Notice, 
use best endeav ours to submit its answer (the “Answer ”), which shall provide 
detailed reasons for its conduct and set out, inter alia, all issues of both fact and 
law, including any suggestions as to the procedure, and all documents relied 
upon, e.g. documents, agreement s, expert reports, and witness statements. The 
Answer shall, if appropriate, contain a detailed description of the action which 
Connect Airways proposes to undertake vis -à-vis the Requesting Party (including, 
if appropriate, a draft contract comprising all  relevant terms and conditions) and 
the Trustee Proposal (if not already submitted), including a comment as to its 
appropriateness.  
5.2 APPOINTMENT OF THE ARBITRATORS  
5.2.1 The Arbitral Tribunal shall consist of three persons. The Requesting Party shall 
nominate its  arbitrator in the Notice; Connect Airways shall nominate its 
arbitrator in the Answer.  
5.2.2 The arbitrators nominated by the Requesting Party and Connect Airways shall, 
within five (5) working days of the nomination of the latter, nominate the 
chairman, making  such nomination known to the parties and the Arbitral 
Institution which shall forthwith confirm the appointment of all three arbitrators. 
Should the Requesting Party wish to have the Dispute decided by a sole arbitrator 
it shall indicate this in the Notic e. In this case, the Requesting Party and Connect 
Airways shall agree on the nomination of a sole arbitrator within five (5) working 
days from the communication of the Answer, communicating this to the Arbitral 
Institution. Should Connect Airways fail to n ominate an arbitrator, or if the two 
arbitrators fail to agree on the chairman, or should the parties to the Arbitration 
fail to agree on a sole arbitrator, the default appointment(s) shall be made by the 
Arbitral Institution. The three -person arbitral tri bunal or, as the case may be, the 
sole arbitrator, are herein referred to as the “Arbitral  Tribunal ”. 
5.3 ARBITRATION PROCEDURE  
5.3.1 The Dispute shall be finally resolved by arbitration under the ICC rules, with such 
modifications or adaptations as foreseen herein or necessary under the 
circumstances (the “Rules ”). Subject to Clause 5.3.2, the seat, or legal place, of 
the arbitration shall be London, England in the English language.  
5.3.2 In the event that  European Union law ceases to apply to the United Kingdom 
pursuant to Article 50(3) of the Treaty on European Union, the seat, or legal 
place, of the arbitration shall be Paris, France in the English language.  
5.3.3 The procedure shall be a fast -track procedure. For this purpose, the Arbitral 
Tribunal shall shorten all applicab le procedural time -limits under the Rules as far 
 
16 
 as admissible and appropriate in the circumstances. The parties to the Arbitration 
shall consent to the use of e -mail for the exchange of documents.  
5.3.4 The Arbitral Tribunal shall, as soon as practical after th e confirmation of the 
Arbitral Tribunal, hold an organisational conference to discuss any procedural 
issues with the parties to the Arbitration. Terms of reference shall be drawn up 
and signed by the parties to the Arbitration and the Arbitration Tribunal at the 
organisational meeting or thereafter and a procedural time -table shall be 
established by the Arbitral Tribunal. An oral hearing shall, as a rule, be 
established within two (2) months of the confirmation of the Arbitral Tribunal.  
5.3.5 In order to enable t he Arbitral Tribunal to reach a decision, it shall be entitled to 
request any relevant information from the parties to the Arbitration, to appoint 
experts and to examine them at the hearing, and to establish the facts by all 
appropriate means. The Arbitral  Tribunal is also entitled to ask for assistance by 
the Monitoring Trustee in all stages of the procedure if the parties to the 
Arbitration agree.  
5.3.6 The Arbitral Tribunal shall not disclose confidential information and apply the 
standards attributable to con fidential information under the Merger Regulation. 
The Arbitral Tribunal may take the measures necessary for protecting confidential 
information in particular by restricting access to confidential information to the 
Arbitral Tribunal, the Monitoring Truste e, the Commission and outside counsel 
and experts of the opposing party.  
5.3.7 The burden of proof in any dispute under these Rules shall be borne as follows: 
(i) the Requesting Party must produce evidence of a prima facie case and (ii) if 
the Requesting Party p roduces evidence of a prima facie case, the Arbitral 
Tribunal must find in favour of the Requesting Party unless Connect Airways can 
produce evidence to the contrary.  
5.4 INVOLVEMENT OF THE COMMISSION  
5.4.1 The Commission shall be allowed and enabled to participate in all stages of  the 
procedure by:  
(a) receiving all written submissions (including documents and reports, etc.) 
made by the parties to the Arbitration;  
(b) receiving all orders, interim and final awards and other documents 
exchanged by the Arbitral Tribunal with the parties to the Arbitration 
(including Terms of reference and procedural time -table);  
(c) giving the Commission the opportunity to file amicus curiae briefs; and  
(d) being present at the hearing(s) and being allowed to ask questions to 
parties, witnesses and ex perts.  
5.4.2 The Arbitral Tribunal shall forward, or shall order the parties to the Arbitration to 
forward, the documents mentioned to the Commission without delay via the use 
of e-mail. In the event of disagreement between the parties to the Arbitration 
regardi ng the interpretation of the Commitments, the Arbitral Tribunal may seek 
the Commission’s interpretation of the Commitments before finding in favour of 
any party to the Arbitration and shall be bound by the interpretation.  
 
17 
 5.5 DECISIONS OF THE ARBITRAL TRIBUNA L 
5.5.1 The Arbitral Tribunal shall decide the dispute on the basis of the Commitments 
and the Decision. Issues not covered by the Commitments and the Decision shall 
be decided (in the order as stated) by reference to the Merger Regulation, EU law 
and general pr inciples of law common to the legal orders of the Member States 
without a requirement to apply a particular national system. The Arbitral Tribunal 
shall take all decisions by majority vote.  
5.5.2 Upon request of the Requesting Party, the Arbitral Tribunal may ma ke a 
preliminary ruling on the Dispute. The preliminary ruling shall be rendered within 
one (1) month of the confirmation of the Arbitral Tribunal. The preliminary ruling 
shall be applicable immediately and, as a rule, remain in force until the final 
decis ion is issued.  
5.5.3 The final award shall, as a rule, be rendered by the arbitrators within six (6) 
months after the confirmation of the Arbitral Tribunal. The time -frame shall, in 
any case, be extended by the time the Commission takes to submit an 
interpretati on of the Commitment if asked by the Arbitral Tribunal.  
5.5.4 The Arbitral Tribunal shall, in their preliminary ruling as well as the final award, 
specify the action, if any, to be taken by Connect Airways in order to comply with 
the Commitments vis -à-vis the Re questing Party (e.g. specify a contract including 
all relevant terms and conditions). The final award shall be final and binding on 
the parties to the Arbitration and shall resolve the Dispute and determine any and 
all claims, motions or requests submitted  to the Arbitral  Tribunal.  
5.5.5 The arbitral award shall also determine the reimbursement of the costs of the 
successful party and the allocation of the arbitration costs. In case of granting a 
preliminary ruling or if otherwise appropriate, the Arbitral Tribun al shall specify 
that terms and conditions determined in the final award apply retroactively.  
5.5.6 The parties to the Arbitration shall prepare a non -confidential version of the final 
award, without business secrets. The Commission may publish the non -
confident ial version of the award.  
5.5.7 Nothing in the arbitration procedure shall affect the powers of the Commission to 
take decisions in relation to the Commitments in accordance with its powers 
under the Merger Regulation and the  TFEU.  
 
6. REVIEW  CLAUSE  
6.1.1 The Commission may, in response to a request by Connect Airways:  
(a) grant Connect Airways an extension of the deadlines foreseen in the 
Commitments; or  
(b) waive, modify or substitute any one or more undertakings in these 
Commitments, justified by exceptional circumstances.  
6.1.2 At the request of Connect Airways, any or all of the Commitments submitted 
herein may be reviewed, waived or modified by the Commission based on long -
term market evolution. In particular:  
 
18 
 (a) the Commission will consider waiving any or all of the obligations in the 
Commitments to the extent that it finds that Commitments are no longer 
required to maintain effective competition in any relevant market 
because, for instance:  
(i) there has been a material change to the ownership structure of 
Connect Airways; or  
(ii) genera l market conditions have changed to a material extent in the 
context of the Commission ’s assessment. Such changed market 
conditions may include the situation where the total number of 
daily Competitive Air Services or the capacity operated by third 
party airlines, without Slots from the Commitments, on the 
Relevant City Pairs significantly increases.  
(b) the Commission may consider waiving any or all of the obligations in the 
Commitments to the extent that it finds that Commitments are no longer 
required to ma intain effective competition in any relevant market 
because, for instance there has been a Material Increase in Capacity at 
either of the Relevant Airports or any airport in their Airport Catchment 
Area.  
 
7. SUNSET  CLAUSE  
7.1.1 The obligation on Connect Airways to procure that Slots are made available at 
Relevant Airports pursuant to Clause 1.1.1  shall apply in respect of 20 full 
consecutive IATA Seasons startin g from and including Summer Season 2020. A 
Prospective Entrant can thus apply for Slots through the Slot Release Procedure to 
commence a Competitive Air Service in IATA Summer Season 2020 as the 
earliest season and IATA Winter Season 2029/2030 as the last season.  
7.1.2 After the Sunset Date:  
(a) a Prospective Entrant will no longer be able to commence a Competitive 
Air Service pursuant to Clause 1;  
(b) the obligation for Connect Airways to enter into a fare combinability 
agreement with an Eligible Air Services Provider p ursuant to Clause 2.1 
shall cease to have effect; and  
(c) Clause 3 shall cease to have effect.  
7.1.3 For the avoidance of doubt Clauses 7.1.1  and 7.1.2  shall not affect the validity of 
the Slot Release Agreements, fare combinability agreements and FFP agreements 
already entered into operation prior to the Sunset Date. As long as such 
agreements continue to apply, the provisions in these Commitments that concern 
these agreements also continue to apply.  
7.1.4 If there are no Slot Release Agreements in operation on the Sunset Date, then the 
entire Commitments will expire on the Sunset Date.