Case T-342/07

Ryanair Holdings plc

v

European Commission

(Competition – Concentrations – Air transport – Decision declaring a concentration to be incompatible with the common market – Assessment of the effects of the concentration on competition – Barriers to entry – Efficiency gains – Commitments)

Summary of the Judgment

1. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Prospective analysis

(Council Regulation No 139/2004, Arts 2(3) and 8(3))

2. Competition – Concentrations – Examination by the Commission – Commitments by the undertakings concerned capable of rendering the notified transaction compatible with the common market – Obligation on the part of the Commission to examine the concentration as amended by the commitments

(Council Regulation No 139/2004)

3. Competition – Concentrations – Examination by the Commission – Economic assessments – Discretion – Judicial review – Limits

(Council Regulation No 139/2004, Art. 2)

4. Competition – Concentrations – Assessment of compatibility with the common market – Concentration of two airlines

(Council Regulation No 139/2004)

5. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Evidence – High market shares – Concentration of two airlines

(Council Regulation No 139/2004)

6. Competition – Concentrations – Examination by the Commission – Definition of the market in question – Concentration of two airlines

(Council Regulation No 139/2004)

7. Competition – Concentrations – Assessment of compatibility with the common market – Criteria – Overall assessment – Assessment based on evidence

(Council Regulation No 139/2004)

8. Competition – Concentrations – Assessment of compatibility with the common market – Taking into account of actual and potential competition – Existence of barriers to entry on the market

(Council Regulation No 139/2004)

9. Competition – Concentrations – Assessment of compatibility with the common market – Taking into account of actual and potential competition – Existence of barriers to entry on the market

(Commission Notice 2004/C 31/03, para. 74)

10. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Taking into account of efficiency gains – Criteria – Cumulative nature

(Council Regulation No 139/2004, recital 29; Commission Notice 2004/C 31/03, para. 78)

11. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Taking into account of efficiency gains – Criteria – Verifiability

(Council Regulation No 139/2004; Commission Notice 2004/C 31/03, para. 86)

12. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Taking into account of efficiency gains – Criteria – Merger specificity

(Council Regulation No 139/2004; Commission Notice 2004/C 31/03, para. 85)

13. Competition – Concentrations – Assessment of compatibility with the common market – Creation or strengthening of a dominant position – Taking into account of efficiency gains – Criteria – Consumer benefit

(Council Regulation No 139/2004; Commission Notice 2004/C 31/03, paras 79, 80 and 84)

14. Competition – Concentrations – Examination by the Commission – Commitments by the undertakings concerned capable of rendering the notified transaction compatible with the common market – Taking into account of commitments given after the deadline – Conditions

(Council Regulation No 139/2004, Arts 2(2), 6(2), 8(2) and 18(3); Commission Notice on remedies acceptable under Regulations Nos 4064/89 and 447/98, para. 43)

15. Competition – Concentrations – Examination by the Commission – Commitments by the undertakings concerned capable of rendering the notified transaction compatible with the common market – Criteria

(Council Regulation No 139/2004)

1. To declare a concentration incompatible with the common market, the Commission has to prove, in accordance with Article 2(3) of Regulation No 139/2004 on the control of concentrations between undertakings, that the implementation of the notified concentration would significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position.

Such a decision, adopted on the basis of Article 8(3) of the merger regulation, is based on the outcome of a prospective analysis carried out by the Commission. That prospective analysis consists of an examination of how the notified concentration might alter the factors determining the state of competition on a given market in order to establish whether it would give rise to a serious impediment to effective competition. Such an analysis makes it necessary to envisage various chains of cause and effect with a view to ascertaining which of them are the most likely.

(see paras 26-27)

2. Where commitments have been validly proposed by the parties to a concentration during the administrative procedure in order to obtain a decision that the concentration is compatible with the common market, the Commission is required to examine the concentration as modified by those commitments. It is then for the Commission to demonstrate that those commitments do not render the concentration, as modified by the commitments, compatible with the common market.

(see para. 28)

3. The basic provisions of Regulation No 139/2004 on the control of concentrations between undertakings, in particular Article 2, confer on the Commission a certain discretion, especially with respect to assessments of an economic nature. Consequently, review by the Courts of the European Union of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the margin of discretion implicit in the provisions of an economic nature which form part of the rules on concentrations.

Whilst the Courts of the European Union recognise that the Commission has a margin of discretion with regard to economic matters, that does not mean that they must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must they establish, in particular, whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it.

(see paras 29-30)

4. In order to analyse the competitive relationship between two airlines which are parties to a concentration, one providing a low-cost and no-frills service and the other providing a ‘mid-frills’ service, the Commission may take the view that those two companies are, of all the competitors operating on the various routes affected by the concentration, ‘closest competitors’, even though their operating costs and the prices they charge are different, since their operating costs and prices are beginning to resemble each other, and can be differentiated from those of network airlines in the market for those routes.

The fact that they have the same base airport enables these two airlines, inter alia, to benefit from similar advantages and may therefore corroborate the finding that the two companies are ‘closest competitors’.

The Commission is also able to rely on the existence of similar yield management systems, on the monitoring of the competitive behaviour of competitors, on the reactions of one of the parties to the concentration to the promotions carried out by the other or on the monitoring of the competitive behaviour of one party by the other. The Commission is entitled to take that evidence into account in the set of factors which it uses to evaluate the competitive situation.

(see paras 35, 79, 83, 85, 94, 124, 133)

5. Although the importance of market shares may vary from one market to another, the view may legitimately be taken that very large market shares are in themselves, save in exceptional circumstances, evidence of the existence of a dominant position. That may be the situation where there is a market share of 50% or more.

Where the Commission finds that the implementation of a concentration results in very high market shares on a large number of markets affected and a high concentration level, it does not therefore fail to have regard to the burden of proof in finding that such market shares constitute, in themselves, evidence of a dominant position. Such evidence may be dismissed if there are circumstances which might exclude a dominant position despite the high market shares.

As regards a concentration between two airlines, the Commission may decide, by carrying out an analysis of the effects of the concentration on each route affected, that the transaction would significantly impede effective competition as a result of the creation of a dominant position on a number of routes. As those positions are monopolistic, quasi monopolistic or very significant, they are sufficient, in themselves, subject to the analysis of possible commitments and efficiency gains, for a finding that the merger should be declared incompatible with the common market.

(see paras 41, 53-56, 336, 383-385, 445)

6. The Commission does not exceed the limits of its power of appraisal by defining, for the purposes of examining a concentration between two airlines, the markets for passenger air transport on the basis of air routes between two cities or bundles of air routes to the extent that there is substitutability between them according to the specific features of the transaction, and by using different criteria to characterise the substitutability of the routes, inter alia distances and travelling times between airports, the estimated proportion of ‘leisure’ passengers on a route, the so-called ‘airport system’ and the marketing practices of one of the parties to the concentration, analysed with the aid of the technique of bundling evidence.

Such a technique may, of course, include positive and negative factors. The conclusion which the Commission arrives at cannot therefore be called into question simply because a negative factor emerges from its investigation when that factor is duly noted and taken into account in its decision and is not distorted.

In particular, as regards the distances and travelling times between airports, the Commission cannot be criticised for having used a ‘rule’ the approximate nature of which it expressly acknowledges, according to which an airport’s catchment area may be defined as the area within either 100 kilometres or within a one hour drive from the airport, and it states at the same time that that is merely a first “proxy” and that the catchment area may be different due to the specificities of the respective airport.

Likewise, an empirical analysis of price correlation is a factor which, although it does not in itself prove that two airports fall within the same market, constitutes, together with others, a relevant factor which the Commission may take into consideration for the purpose of defining the markets at issue.

(see paras 99, 102-103, 108, 110, 112-113, 115-117, 119)

7. In monitoring a concentration, the Commission may use a set of indicative factors to evaluate the competitive situation and it is the Commission’s task to make an overall assessment of what is shown by such a set of indicative factors. It is possible, in that regard, for certain items of evidence to be prioritised and other evidence to be discounted. In that regard, there is no need to establish a hierarchy between ‘technical evidence’ and ‘non-technical evidence’. The assertion that ‘non-technical evidence’ cannot be taken into account unless it is supported by ‘technical evidence’ cannot therefore be upheld.

That examination and the associated reasoning are subject to a review of legality which the Court carries out in relation to Commission decisions on concentrations.

(see paras 133, 136)

8. When, after assessing the competition between the parties to a concentration and the effects of the concentration on that competition and finding that the merged entity would eliminate competition between the parties to the detriment of customers, the Commission examines the issue of the entrance of new competitors onto the relevant markets, it takes as the starting point the situation where the new entrant is seeking to access the market on which the merged entity would be present. It therefore examines whether the entry of new competitors may be regarded as a competitive constraint which is sufficient to prevent or thwart the potential anti-competitive effects of the concentration.

In order to challenge the Commission’s analysis, what counts is the prospect of an entrant which offsets the anti-competitive effects specifically established. Consequently, the mere ‘threat’ of an entry by a competitor is not sufficient. The argument that the absence of entrants is explained by the current efficiency of one of the parties to the concentration on the relevant markets and by customer satisfaction, which rule out any prospect of an entrant being profitable on those markets, can also not be accepted.

Similarly, the assertion that one of the parties to the concentration does not envisage charging prices higher than required to remain competitive following the implementation of the concentration cannot cast doubt on the Commission’s analysis of the barriers to entry. The control of concentrations differs from the control of the abuse of a dominant position in that it focuses on the control of market structures and not on the control of companies’ conduct. The control of concentrations aims, on the basis of a prospective analysis of the market structures, to prevent the implementation of a transaction which would significantly impede effective competition in the common market or a substantial part thereof, in particular by the creation or strengthening of a dominant position. As regards prices, the relevant criterion is thus whether the entry onto the market of a new competitor is capable of preventing prices increasing above their level prior to the concentration. The price criterion is not the only one which may be taken into consideration, since the implementation of the concentration may also affect available capacity, choice, quality of service and innovation.

(see paras 237-239, 248-250, 279)

9. In analysing the compatibility of a concentration with the common market, the assessment of the barriers to entry on the market depends on the characteristics of that market and the capabilities of the potential entrants. In relation to timeliness of entry, in point 74 of the Guidelines on the assessment of horizontal mergers, the Commission refers to a period which should not normally exceed 2 years. However, that time-limit depends on the situation being examined. In any event, the Commission is, in those guidelines, merely providing an analytical framework which it may apply, further develop and refine in individual cases.

(see paras 293-295)

10. Recital 29 in the preamble to Regulation No 139/2004 on the control of concentrations between undertakings provides that in order to determine the impact of a concentration on competition in the common market, it is appropriate to take account of any substantiated and likely efficiencies put forward by the undertakings concerned. It is possible that the efficiencies brought about by the concentration counteract the effects on competition, and in particular the potential harm to consumers, that it might otherwise have and that, as a consequence, the concentration would not significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position. Point 78 of the Guidelines on the assessment of horizontal mergers adopted by the Commission states that for the Commission to take account of efficiency claims in its assessment of the concentration and be in a position to reach the conclusion that, as a consequence of efficiencies, there are no grounds for declaring the merger to be incompatible with the common market, the efficiencies have to benefit consumers, be merger-specific and be verifiable. These conditions are cumulative.

It is incumbent upon the notifying parties to provide evidence of the fact that the efficiencies claimed are capable of counteracting the negative effects that the transaction could otherwise have on competition.

(see paras 386-387, 412)

11. It is apparent from point 86 of the Guidelines on the assessment of horizontal mergers adopted by the Commission that efficiencies have to be verifiable so that the Commission can be reasonably certain that the efficiencies are likely to materialise and be substantial enough to counteract a merger’s potential harm to consumers. The more precise and convincing the efficiency claims are, the better the Commission can evaluate the claims. Where reasonably possible, efficiencies and the resulting benefit to consumers should therefore be quantified and, when the necessary data are not available to allow for a precise quantitative analysis, it must be possible to foresee a clearly identifiable positive impact on consumers, not a marginal one.

The condition relating to the verifiability of efficiencies does not therefore require the notifying party to provide data capable of being independently verified by a third party or documents, dated pre-merger, which serve to objectively and independently assess the scope for efficiency gains generated by the acquisition.

It is apparent from those guidelines that most of the information allowing the Commission to assess efficiencies is solely in the possession of the parties to the concentration and that it is, therefore, incumbent upon the notifying parties to provide in due time the relevant information. Similarly, the non-exhaustive list of evidence relevant to the assessment of efficiency claims includes evidence of various kinds, and does not stress that it must be capable of being independently verified or dated pre-merger.

An undertaking which is a party to a concentration is therefore entitled to submit to the Commission its own data about the efficiencies expected from the merger, without necessarily having to rely on an assessment capable of being independently verified by a third party or carried out before the merger was announced. Business life does not always allow such documents to be produced in due time and, in particular, the documents used by an undertaking to initiate a public bid, whether they come from that undertaking or from its advisers, are by nature likely to be of some relevance as regards substantiating efficiency claims.

(see paras 406-408, 410)

12. It is apparent from point 85 of the Guidelines on the assessment of horizontal mergers adopted by the Commission that efficiencies are relevant to the competitive assessment when they are a direct consequence of the notified concentration and cannot be achieved to a similar extent by less anti-competitive alternatives. In those circumstances, the Commission deems the efficiencies to be caused by the concentration and thus to be merger-specific. It is for the parties to the concentration to provide in due time all the relevant information necessary to demonstrate that there are no less anti-competitive, realistic and attainable alternatives than the notified concentration. The Commission only considers alternatives that are reasonably practical in the business situation faced by the parties to the concentration having regard to established business practices in the industry concerned.

(see para. 427)

13. As regards consumer benefit, it is apparent from point 79 of the Guidelines on the assessment of horizontal mergers adopted by the Commission that the relevant benchmark in assessing efficiency claims is that consumers will not be worse off as a result of the merger. For that purpose, efficiencies should be substantial and timely, and should, in principle, benefit consumers in those relevant markets where it is otherwise likely that competition concerns would occur. Mergers may bring about various types of efficiency gains that can lead to lower prices or other benefits to consumers. For example, cost savings in production or distribution may give the merged entity the ability and incentive to charge lower prices following the merger. In line with the need to ascertain whether efficiencies will lead to a net benefit to consumers, cost efficiencies that lead to reductions in variable or marginal costs are more likely to be relevant to the assessment of efficiencies than reductions in fixed costs; the former are, in principle, more likely to result in lower prices for consumers. Cost reductions which merely result from anti-competitive reductions in output cannot be considered to be efficiencies benefiting consumers.

Furthermore, the incentive on the part of the merged entity to pass efficiency gains on to consumers is often related to the existence of competitive pressure from the remaining firms in the market and from potential entry. The greater the possible negative effects on competition, the more the Commission has to be sure that the claimed efficiencies are substantial, likely to be realised, and to be passed on, to a sufficient degree, to the consumer. As regards that point, the Guidelines state that it is highly unlikely that a merger leading to a market position approaching that of a monopoly, or leading to a similar level of market power, can be declared compatible with the common market on the ground that efficiency gains would be sufficient to counteract its potential anti-competitive effects.

(see paras 434-436)

14. As part of the arrangements for control of a concentration, the undertakings concerned may submit commitments to the Commission in order to obtain a decision finding their concentration to be compatible with the common market. Depending on the stage which the administrative procedure has reached, the commitments proposed must allow the Commission either to form the view that the notified concentration does not raise serious doubts as to its compatibility with the common market at the stage of the preliminary examination or to respond to the objections sustained during the detailed investigation. Those commitments therefore make it possible to avoid the initiation of a detailed investigation phase or a subsequent decision declaring that the concentration is incompatible with the common market. Article 8(2) of Regulation No 139/2004 on the control of concentrations between undertakings allows the Commission to attach to a decision declaring a concentration compatible with the common market in accordance with the criterion laid down in Article 2(2) of the regulation conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered into vis-à-vis the Commission with a view to rendering the concentration compatible with the common market.

Having regard both to the significance of the financial interests and industrial or commercial stakes inherent in that type of transaction and to the powers available to the Commission in the field, it is in the interest of the undertakings concerned to facilitate the work of the administration. For the same reasons, the Commission must display the utmost diligence in performing its supervisory duties in the field of concentrations.

As regards commitments which are submitted out of time, it is apparent from the Commission Notice on remedies acceptable under Regulation No 4064/89 and under Regulation No 447/98, whose approach may be adopted by the Commission as regards Regulation No 139/2004 and Regulation No 802/2004, that the parties to a notified concentration may have such commitments taken into account subject to two cumulative conditions, namely, first, that those commitments clearly and without the need for further investigation resolve the competition concerns previously identified and, secondly, that there is sufficient time to consult the Member States on those commitments.

(see paras 448-451, 455)

15. In the context of Regulation No 139/2004 on the control of concentrations between undertakings, the Commission has power to accept only such commitments as are capable of rendering the notified transaction compatible with the common market. In that regard, commitments proposed by one of the parties to a merger will meet that condition only in so far as the Commission is able to conclude, with certainty, that it will be possible to implement them and that the remedies resulting from them will be sufficiently workable and lasting to ensure that the creation or strengthening of a dominant position, or the impairment of effective competition, which the commitments are intended to prevent, will not be likely to materialise in the relatively near future.

(see paras 452-453)

JUDGMENT OF THE GENERAL COURT (Third Chamber)

6 July 2010 ( )

(Competition – Concentrations – Air transport – Decision declaring a concentration to be incompatible with the common market – Assessment of the effects of the concentration on competition – Barriers to entry – Efficiency gains – Commitments)

In Case T‑342/07,

Ryanair Holdings plc, established in Dublin (Ireland), represented by J. Swift QC, V. Power, A. McCarthy and D. Hull, Solicitors, and G. Berrisch, lawyer,

applicant,

v

European Commission, represented by X. Lewis and S. Noë, acting as Agents,

defendant,

supported by

Aer Lingus Group plc, established in Dublin, represented initially by A. Burnside, Solicitor, B. van de Walle de Ghelcke and T. Snels, lawyers, and subsequently by A. Burnside and B. van de Walle de Ghelcke,

and by

Ireland, represented by D. O’Hagan and J. Buttimore, acting as Agents, and M. Cush S.C, D. Barniville S.C. and N. Travers, B.L.,

interveners,

APPLICATION for the annulment of Commission Decision C(2007) 3104 of 27 June 2007 declaring a concentration to be incompatible with the common market and the EEA Agreement (Case COMP/M.4439 – Ryanair/Aer Lingus),





THE GENERAL COURT (Third Chamber),

composed of J. Azizi, President, E. Cremona and S. Frimodt Nielsen (Rapporteur), Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 6 July 2009,

gives the following

Judgment

Factual background to the dispute

A – Parties to the proceedings

1 Ryanair Holdings plc (‘the applicant’ or ‘Ryanair’) is a publicly listed company and in 2006 had a fleet of 120 aircraft (not including the 161 aircraft ordered and to be delivered over the next six years). Those aircraft were used at that time for scheduled flights to more than 400 destinations in 40 countries, including 75 routes between Ireland (mainly from Dublin airport, but also from Shannon, Cork, Kerry and Knock airports) and other European countries.

2 Aer Lingus Group plc is a public limited company incorporated under Irish law. After it was privatised by the Irish Government in 2006, the State retained 25.35% of the capital and Aer Lingus Group’s shares were quoted on the stock exchange on 2 October 2006. Aer Lingus Group is the holding company of Aer Lingus Ltd (together hereinafter referred to as ‘Aer Lingus’), an Irish-based airline which provides scheduled flights to or from Dublin, Cork and Shannon airports. In 2006 Aer Lingus operated a short-haul network on 70 routes between Ireland and the United Kingdom and other Member States with a fleet of 28 aircraft (32 as from the end of 2007). Its long-haul fleet of 7 aircraft (9 as from the end of 2007) enabled it to provide services to various destinations in the United States and Dubai.

B – Administrative procedure

3 On 5 October 2006 Ryanair announced its intention to launch a public bid (‘the public bid’) for the entire share capital of Aer Lingus Group. The public bid was made on 23 October 2006.

4 The concentration was notified to the Commission of the European Communities on 30 October 2006.

5 In its decision of 20 December 2006, the Commission stated that the concentration raised serious doubts as to its compatibility with the common market and decided to initiate the detailed examination procedure under Article 6(1)(c) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1) (‘the merger regulation’).

6 On 27 March 2007 a statement of objections was sent to Ryanair under Article 18 of the merger regulation. Ryanair responded to that statement of objections on 17 April 2007.

7 By Decision C(2007) 3104 of 27 June 2007 the Commission declared that the notified concentration was incompatible with the common market (Case COMP/M.4439 – Ryanair/Aer Lingus) (‘the contested decision’).

C – Content of the contested decision

8 After pointing out that the notified concentration had a Community dimension (sections 3 and 4 of the contested decision), the Commission explained how the investigation had been carried out (section 5). It noted that the investigation had required several requests for information under Article 11 of the merger regulation, in particular to other scheduled airlines, charter companies, airports and corporate customers, as well as contacts with the slot coordination authorities, civil aviation authorities and transport authorities. The Commission also analysed the correlation between prices in order to define the relevant markets (section 6.3 of, and Annex III to, the contested decision) and hired an independent consultant to carry out a customer survey at Dublin airport (section 7.3.5 and Annexes I and II). It also examined the econometric observations submitted by Ryanair and Aer Lingus, and carried out two series of price regression analyses to test empirically the likely effects of the concentration (section 7.4.3 and Annex IV).

1. Relevant markets

9 As regards the definition of the relevant markets (section 6 of the contested decision), the Commission stated that Ryanair and Aer Lingus both supplied scheduled passenger air transport services in Europe. In accordance with its practice, the Commission essentially examined the substitutability in terms of demand. It defined the relevant markets on the basis of the ‘point of origin and point of destination’ approach, known as the ‘O&D-approach’, whereby each route between a point of origin and a point of destination is defined as a separate market. To determine whether a given O&D pair constituted a relevant market, the Commission examined the different possibilities available to consumers for travelling between those two points. It also examined whether the flights departing from Dublin (or from Shannon or Cork, the other two Irish airports used by the parties to the concentration) to two (or more) airports serving the same city were substitutable (section 6.3). In view of the services offered by Ryanair and Aer Lingus, the Commission found that the proposed concentration would lead to horizontal overlaps in respect of 35 pairs of cities which make up the relevant markets (recital 333) and that it might raise concerns in relation to a large number of pairs of cities which make up the relevant markets where only one of the parties to the concentration operates (recital 334).

2. Assessment of the effects of the concentration on competition

10 As regards the assessment of the effects of the concentration, the Commission referred to the analytical framework defined in its Guidelines on the assessment of horizontal mergers under the merger regulation (OJ 2004 C 31, p. 5) (‘the Guidelines’).

11 First, the Commission analysed the market shares of Ryanair and Aer Lingus in respect of the 35 routes on which their services overlap. It found that the concentration would create a monopoly on 22 routes and would lead to very significant market shares on 13 others (section 7.2). The Commission also considered that the two companies were ‘closest competitors’ on all the affected routes (section 7.3) and that, contrary to the statements made by Ryanair, those two companies were competing with each other at that time (section 7.4). The Commission then examined the effects of the concentration on the markets on which Ryanair and Aer Lingus are actual or potential competitors and found that the concentration would eliminate actual competition on 35 routes on which their services overlap and the potential competition on 15 routes on which there is no overlap (sections 7.5 and 7.6).

12 Second, the Commission noted that the ‘fragmented customers’ of Ryanair and Aer Lingus did not have any ‘countervailing buyer power’ and only limited or no possibilities of switching suppliers (section 7.7).

13 Third, the Commission examined whether the entry of new competitors onto the market or the expansion of existing competitors was likely to eliminate the anti‑competitive effects of the concentration, before coming to the conclusion that that would not be the case (section 7.8).

14 Fourth, the Commission went on to examine on a route by route basis the 35 routes on which the services overlap. It found that the concentration would significantly impede effective competition as a result of the creation of a dominant position on each of the routes (section 7.9).

15 Fifth, the Commission examined whether the gains in efficiency claimed by Ryanair were sufficient to counterbalance the negative effects on competition produced by the concentration. It concluded that that was not the case since those gains were not verifiable, they were not specific to the concentration and they were not likely to benefit consumers (section 7.10).

3. Assessment of the commitments

16 The Commission also examined the commitments proposed by Ryanair during the administrative procedure. It considered that they were not sufficiently clear to be implemented and that, in any event, they were not capable of remedying the problems raised in relation to competition (section 8).

17 In conclusion, the Commission considered that the implementation of the concentration would significantly impede effective competition, in particular as a result, first, of the creation of a dominant position on 35 routes from and to Dublin, Shannon and Cork, and, second, of the creation or strengthening of a dominant position on 15 routes from and to Dublin and Cork. It therefore declared the concentration incompatible with the common market (section 9 and the operative part).

Procedure and forms of order sought

18 By application lodged at the Registry of the Court on 10 September 2007, the applicant brought an action for annulment of the contested decision.

19 By order of 12 February 2008, the President of the Third Chamber of the Court granted leave to Ireland and Aer Lingus Group to intervene in support of the form of order sought by the Commission.

20 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure.

21 The parties presented oral argument and replied to the questions put by the Court at the hearing on 6 July 2009.

22 The applicant claims that the Court should:

– annul the contested decision;

– order the Commission to pay the costs;

– order Ireland and Aer Lingus Group to pay the costs occasioned by their intervention.

23 The Commission contends that the Court should:

– dismiss the application;

– order the applicant to pay the costs.

24 Aer Lingus Group contends that the Court should:

– dismiss the application;

– order the applicant to pay the costs.

25 Ireland contends that the Court should:

– dismiss the application;

– order the applicant to pay the costs.

Law

26 To declare a concentration incompatible with the common market, the Commission has to prove, in accordance with Article 2(3) of the merger regulation, that the implementation of the notified concentration would significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position.

27 Such a decision, adopted on the basis of Article 8(3) of the merger regulation, is based on the outcome of a prospective analysis carried out by the Commission. That prospective analysis consists of an examination of how the notified concentration might alter the factors determining the state of competition on a given market in order to establish whether it would give rise to a serious impediment to effective competition. Such an analysis makes it necessary to envisage various chains of cause and effect with a view to ascertaining which of them are the most likely (see, in relation to Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (corrected version in OJ 1990 L 257, p. 13), as amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (OJ 1997 L 180, p. 1) (‘the previous merger regulation’), and Case C‑12/03 P Commission v Tetra Laval [2005] ECR I‑987, paragraph 43).

28 Where commitments have been validly proposed by the parties to the concentration during the administrative procedure in order to obtain a decision that the concentration is compatible with the common market, the Commission is required to examine the concentration as modified by those commitments. It is then for the Commission to demonstrate that those commitments do not render the concentration, as modified by the commitments, compatible with the common market (see, to that effect, in relation to the previous merger regulation, Case T‑87/05 EDP v Commission [2005] ECR II‑3745, paragraphs 63 to 65).

29 In addition, the Court of Justice has held that the basic provisions of the regulation, in particular Article 2, confer on the Commission a certain discretion, especially with respect to assessments of an economic nature, and that, consequently, review by the Courts of the European Union of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the margin of discretion implicit in the provisions of an economic nature which form part of the rules on concentrations (see, in relation to the previous merger regulation, Joined Cases C‑68/94 and C‑30/95 France and Others v Commission (‘Kali & Salz’) [1998] ECR I‑1375, paragraphs 223 and 224, and Commission v Tetra Laval, cited in paragraph 27 above, paragraph 38).

30 Whilst the Courts of the European Union recognise that the Commission has a margin of discretion with regard to economic matters, that does not mean that they must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must they establish, in particular, whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (see, in relation to the previous merger regulation, Commission v Tetra Laval, cited in paragraph 27 above, paragraph 39, and Case C‑413/03 P Bertelsmann and Sony Corporation of America v Impala [2008] ECR I‑4951, paragraph 69).

31 In addition, according to settled case-law, where the institutions have a power of appraisal, respect for the rights guaranteed by the legal order of the European Union in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the Commission to examine carefully and impartially all the relevant aspects of the individual case, the right of the person concerned to make his views known and also his right to have an adequately reasoned decision (C‑269/90 Technische Universität München [1991] ECR I‑5469, paragraph 14, and Case T‑151/05 NVV and Others v Commission [2009] ECR II‑1219, paragraph 163).

32 The parties’ arguments must be assessed in the light of those principles governing the Court’s review of legality in matters concerning concentrations.

33 The applicant puts forward five pleas in law in support of its application. The first alleges manifest errors of assessment regarding the competitive relationship between Ryanair and Aer Lingus; the second plea alleges manifest errors in the assessment of barriers to entry; the third plea alleges manifest errors of assessment in the route-by-route analysis; the fourth plea alleges manifest errors in the assessment of the efficiencies which would flow from the concentration; and the fifth plea alleges manifest errors of assessment in the analysis of the commitments proposed by Ryanair (see paragraphs 11 and 13 to 16 above).

34 The definition of the relevant markets and the analysis of the customer reactions are not disputed, as such, by the applicant (see paragraphs 9 and 12 above).

A – The first plea, concerning the appraisal of the competitive relationship between Ryanair and Aer Lingus

35 The Commission’s analysis in the contested decision, which is relevant for the assessment of this plea, comprises the following stages: first, the finding that the concentration would lead to very high market shares on a large number of routes (section 7.2); second, the finding that Ryanair and Aer Lingus are ‘closest competitors’ on all those routes (section 7.3); third, the assessment of the actual competition between Ryanair and Aer Lingus (section 7.4); and fourth, the effects of the concentration on the actual competition between Ryanair and Aer Lingus and the negative repercussions for customers (sections 7.5 and 7.6). In the course of that analysis, the Commission responded to Ryanair’s argument regarding the difference in service which it provides, namely a low-cost and no-frills service, from that provided by Aer Lingus, namely a ‘mid-frills’ service (section 7.3).

36 The applicant essentially criticises that aspect of the contested decision by submitting that the Commission overestimated the size of the high market shares held by the parties to the concentration and that it did not produce sufficient evidence to show that, despite their differences, the degree of competitive constraint exercised by Ryanair and Aer Lingus on each other was so significant, and the likelihood of the entry of other airlines so low, that the concentration would significantly impede effective competition on those markets.

37 The Commission, supported by Ireland and Aer Lingus Group, contends that the market shares provide ‘useful first indications’, which are corroborated by other evidence showing that Aer Lingus is Ryanair’s closest competitor on the routes on which their services overlap. The concentration would therefore result in the disappearance of the competitive constraint at present exercised by Aer Lingus on Ryanair.

38 It is necessary for the Court to examine, one by one, the parties’ arguments concerning the ‘excessive weight’ accorded to the market shares, the failure to take account of the ‘fundamental differences’ between Ryanair and Aer Lingus, the competitive advantage of having a base at Dublin airport, the ‘non-technical evidence’, the Commission’s econometric analysis, the econometric information submitted by Ryanair, the competitive constraints exerted by charter companies, the passenger survey, the survey of corporate customers and, finally, the harm to consumers.

1. The ‘excessive weight’ accorded to the market shares

a) Arguments of the parties

39 The applicant claims that, in the contested decision, the Commission based its finding on the false premiss that Ryanair and Aer Lingus are ‘like for like’ carriers, so that it could ‘automatically’ be inferred from their high market shares that the merger would result in a significant impediment to effective competition. While market shares are relevant to any assessment of a concentration from the point of view of competition, they are only a ‘starting point’. To attribute to such market shares a heavy negative presumption regarding the effects of the concentration on competition is to reverse the burden of proof. In any event, that presumption was overturned by the applicant, which established to a sufficient legal standard that there were ‘significant differences’ between the two companies and low barriers to entry. The services offered by Ryanair and Aer Lingus are ‘highly differentiated’ and focus on separate categories of passengers. Accordingly, market shares do not in themselves indicate the extent to which the parties exert a competitive constraint on each other. In addition, the presence of only one airline on a given route does not, because of the ease of entry, amount to a dominant position.

40 The Commission, supported by Ireland and Aer Lingus Group, contends that it is apparent from the contested decision that market shares provide ‘useful first indications’, which are corroborated by other information showing that Aer Lingus is Ryanair’s closest competitor on the routes at issue in the present case.

b) Findings of the Court

41 It is settled case-law that, although the importance of market shares may vary from one market to another, the view may legitimately be taken that very large market shares are in themselves, save in exceptional circumstances, evidence of the existence of a dominant position (see, in relation to abuse of a dominant position, Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 41, and, in relation to the previous merger regulation, Case T‑102/96 Gencor v Commission [1999] ECR II‑753, paragraph 205, and Case T‑221/95 Endemol v Commission [1999] ECR II‑1299, paragraph 134). That may be the situation where there is a market share of 50% or more (see, in relation to abuse of a dominant position, Case C‑62/86 AKZO v Commission [1991] ECR I‑3359, paragraph 60, and, in relation to the previous merger regulation, Case T‑210/01 General Electric v Commission [2005] ECR II‑5575, paragraph 115).

42 In the present case, it should be noted, first, that contrary to the submissions of the applicant, the Commission did not base its assessment of the effects of the concentration on competition on the notion that it could ‘automatically’ be inferred from the high market shares that the concentration would result in a significant impediment to effective competition. On the contrary, the Commission expressly stated in the contested decision that both the market shares and the concentration levels associated with them provided ‘useful first indications’ of the market structure and of the competitive importance of both the parties to the concentration and their competitors (see recital 348 and footnote 364, in which reference is made to point 14 of the Guidelines). An examination of the contested decision also shows that the Commission took care to carry out an in-depth analysis of the conditions of competition by taking account of factors other than just market shares, such as the effects of the concentration on competition between Ryanair and Aer Lingus, the reactions which could be expected from customers and competitors and the actual situation on each route affected by the concentration (see paragraphs 11 to 14 above).

43 It can thus not be claimed that the contested decision is based on findings related solely to the combined market share which Ryanair and Aer Lingus would be likely to hold if the concentration were to be implemented (‘Ryanair-Aer Lingus combined’ or ‘the merged entity’). The Commission examined, simultaneously, the statistics illustrating the situation on the markets affected by the concentration at a given point in time, and dynamic data indicating the likely evolution of those markets if the concentration were to be implemented.

44 That approach is consistent with the analytical approach which the Commission must adopt when assessing the anti-competitive effects of a concentration, in which it examines how the notified concentration could change the factors which determine the state of competition on a given market in order to assess whether it would give rise to a serious impediment to effective competition (see paragraph 27 above).

45 Second, it should be pointed out that in its assessment the Commission could not ignore the importance to be attached to those initial indications, which showed that the implementation of the notified concentration would have enabled Ryanair to acquire extremely high market shares.

46 The Commission identified in the contested decision 35 routes on which the activities of the parties to the concentration overlap. The transaction would create a monopoly on 22 of those routes and would lead to the creation of a very high cumulative market share, more than 60%, on 13 others (see recitals 341 and 342 of the contested decision, in particular table 2 and the corresponding footnotes). In addition, on the routes where Ryanair or Aer Lingus currently operates, the other party to the concentration would represent the most likely potential competitor. Therefore, it is apparent from those findings that the implementation of the concentration would result in the acquisition of very high market shares on a significant number of routes (section 7.2 of the contested decision).

47 The Commission also stressed in the contested decision that, even on the few routes which are not monopolised and on which a certain number of competitors operate, such as the Dublin-London route on which the combined market share of Ryanair and Aer Lingus is in the region of 70 to 80% and on which British Midland Airways (BMI), British Airways and CityJet provide services, the Herfindahl-Hirschmann-Index, which is commonly used by the competition authorities to measure the concentration level on a market by taking account of the respective weight of each of the undertakings on it, was very high (between 6 000 and 6 500), as was the variation in that concentration level before and after the implementation of the concentration (the delta was between 3 000 and 3 500). The concentration level created through that concentration on the 35 routes on which the activities of the parties to the concentration overlap would therefore be very high (recital 342).

48 Thus, on 16 routes, Ryanair and Aer Lingus would hold a cumulative market share of 100%. Those routes are Dublin-Berlin, Dublin-Bilbao (Vitoria), Dublin‑Birmingham, Dublin-Bologna, Dublin-Brussels, Dublin-Edinburgh, Dublin-Hamburg (Lübeck), Dublin-Marseille, Dublin-Newcastle, Dublin-Poznan, Dublin-Rome, Dublin-Seville, Dublin-Toulouse (Carcassonne), Dublin-Venice, Shannon-London and Cork-London.

49 On six other routes, namely Dublin-Alicante, Dublin-Faro, Dublin-Lyon, Dublin‑Milan, Dublin-Salzburg and Dublin-Tenerife, Ryanair-Aer Lingus combined would hold a total market share of almost 100%, but would not reach that level because charter companies also sell ‘flight only’ tickets.

50 On the most important route, Dublin-London, which alone represents 30% of passengers transported by aeroplane between Ireland and the other Member States of the Union, the market share of the merged entity would be in the region of 70 to 80%.

51 On the other routes, the combined market share would also be very high. On the Dublin-Manchester route, for example, the combined market share would be in the region of 90 to 100%, the only competitor on that route being Luxair which operated a service to and from Luxembourg via Manchester.

52 Anyone wishing to travel to one of the destinations cited above has a choice, the extent of which is easy to measure, prima facie, both before and after the implementation of the concentration. Very often, that element of choice would disappear purely and simply if Ryanair were to take over Aer Lingus, as their total market share would amount to 100% or almost 100%.

53 In the light of those findings, which are not disputed as such by the applicant, the Commission was rightly able to find that the acquisition of very high market shares as a result of both the implementation of the concentration and the concentration level associated with it were relevant indicators of the market power which would have been acquired by Ryanair-Aer Lingus combined.

54 Those findings had to be duly taken into account by the Commission and constitute, as such, elements enabling the finding that, save in exceptional circumstances, those extremely high market shares constituted, in themselves, evidence of the existence of a dominant position (see paragraph 41 above).

55 In that regard, the Commission cannot be accused of having failed to have regard to the burden of proof in finding, as set out in the heading of section 7.2.2 of the contested decision, that ‘[t]he very high market shares on all overlap routes constitute evidence of a dominant position’.

56 It should be noted that, contrary to what the applicant claims, the impact of that evidence on the evaluation of competition was by no means regarded as automatic. It is apparent from the contested decision that such evidence could have been dismissed if those ‘useful first indications’ of the market structure and of the competitive importance of both the parties to the concentration and their competitors were contradicted by the other information available in the case. The Commission thus clearly set out its approach in the contested decision by stating that it ‘[had] carefully analysed whether there [were] circumstances which might exclude a dominant position in the present case despite the high market shares’ (recital 351). That analysis was made in sections 7.3 to 7.8, in relation to the assessment of the relevant factors in general terms, and in section 7.9, in relation to the route-by-route analysis.

57 It is from that point of view that it is necessary to examine the arguments raised by the applicant to contest the importance given to the market shares which Ryanair‑Aer Lingus combined would have held.

58 First of all, in relation to the routes on which Aer Lingus and Ryanair both operate at present, the applicant submits that the services offered by those operators are ‘highly differentiated’ and thus actually target separate categories of passengers. In that regard, it should be noted that the issue of the differentiation of the services is the question of their varying degree of substitutability for the customers concerned. In the contested decision, the Commission rejected the applicant’s claim in that regard (section 7.3). In the Commission’s view, even supposing that the applicant’s claim were founded, the possible differences between the services offered by Ryanair and Aer Lingus would not eliminate the risk that a concentration between those two operators would significantly impede effective competition on the relevant markets. The applicant’s argument regarding service differentiation will be examined below (see paragraph 61 et seq. below).

59 Second, as regards the routes on which only one of those companies operates at present, the applicant submits that the mere fact of operating on a route does not give rise to a dominant position in so far as it would be easy for other airlines to enter the market. That argument relates to the issue of entering the market and will be addressed in the examination of the second plea in law, which is devoted to that issue.

60 Therefore, it is only if those arguments were upheld by the Court that it could be found that the applicant is right to dispute the importance to be attached to the market shares which would have been held by the merged entity. At this stage in the analysis, the Commission cannot however be criticised for having taken account, in the contested decision, of the size of the market shares and the concentration levels in relation to the various relevant markets.

2. The failure to take account of the ‘fundamental differences’ between Ryanair and Aer Lingus

61 The applicant essentially submits that, as its services differ from those of Aer Lingus, the two airlines are not in competition to such a degree that the concentration would significantly impede competition. It claims that, in the contested decision, the Commission could not have concluded the contrary since it failed to establish that Ryanair and Aer Lingus were close competitors.

62 It is necessary for the Court to assess, one by one, the arguments of the parties relating to the use of the ‘closest competitors’ concept and the ‘automatic’ inference that there are significant competitive constraints, the arguments relating to the ‘fundamental differences’ concerning operating costs, prices charged and service levels, and those relating to the difference between the destination airports.

a) Reliance on the ‘closest competitors’ concept and the ‘automatic’ inference that there are significant competitive constraints

Arguments of the parties

63 The applicant maintains that the Commission was guilty of a ‘fundamental fallacy’ in considering that, if it can be shown that Ryanair and Aer Lingus are ‘closest competitors’, it ‘automatically’ follows that they are close competitors exercising significant competitive constraints on each other without there being any need to examine the closeness of that competitive relationship. However, Aer Lingus’s range of services is not substitutable for that of Ryanair, but is closer to that of traditional full-service airlines. ‘Significant differences’ between the two companies enable Aer Lingus to charge substantially higher prices than those of Ryanair. The closeness of the competitive relationship between Ryanair and Aer Lingus should therefore be analysed in order to determine its effects on actual competition. If, as the applicant claims, their services are substantially different, Ryanair and Aer Lingus cannot be regarded as ‘adequate substitutes’, even where they are the only two airlines serving a given route. In other words, the passengers concerned may choose not to travel rather than to opt for the other airline.

64 The Commission, supported by Ireland and Aer Lingus Group, contends that, in the contested decision, it analysed in detail the competitive relationship between the two airlines before finding, to the required legal standard, that Ryanair and Aer Lingus were close competitors that constrain one another in terms of competition and that those constraints would disappear if the concentration were implemented.

Findings of the Court

65 In the applicant’s view, even assuming that Aer Lingus and Ryanair could be regarded as ‘closest competitors’ on all of the routes at issue, none the less, as a result of the ‘fundamental differences’ which exist between them, the Commission could not take that finding and infer ‘automatically’ from it that the two companies exercise a significant competitive constraint on each other and that the concentration would remove those constraints, without examining the closeness of that competitive relationship.

66 Before examining the arguments relating to the differences alleged by the applicant and their impact on the competitive relationship between Ryanair and Aer Lingus (see paragraph 70 et seq. below), it must be noted at the outset that the analysis carried out by the Commission in the contested decision is not the same as the one described by the applicant.

67 That analysis is divided into two stages. First, the findings made by the Commission on the competitive relationship between Ryanair and Aer Lingus result from lengthy discussion (sections 7.3 and 7.4 of the contested decision). In that discussion the Commission examined in detail the arguments put forward by Ryanair, and set out in the present action, concerning the service differentiation. Next, contrary to what the applicant claims, the assessment in the contested decision of the effects of the concentration on competition was not carried out ‘automatically’ on the basis of the mere finding that Ryanair and Aer Lingus are ‘closest competitors’. The Commission carefully set out in the contested decision the reasons why the concentration would significantly impede effective competition in the common market on the 35 routes on which the services overlap and on the 15 routes operated by Aer Lingus on which the services do not overlap (sections 7.5, 7.6 and 7.9).

68 Consequently, as is the case with the importance to be given to the cumulative market shares (see paragraph 58 above), it is the response to the applicant’s arguments relating to the alleged impact of the service differentiation on the competitive relationship between Aer Lingus and Ryanair (see paragraph 70 et seq. below) which will enable the Court to determine whether or not the conclusions drawn by the Commission in its assessment of the effects of the concentration on competition are well founded.

69 In any event, since the service differentiation alleged by Ryanair was examined in the contested decision, it can thus not be claimed in this case that the Commission ‘automatically’ inferred from the finding that Ryanair and Aer Lingus are ‘closest competitors’ on all of the relevant routes that the two airlines exercised a significant competitive constraint on each other which the concentration would eliminate and there was no need to examine the closeness of that competitive relationship.

b) The ‘fundamental differences’ concerning operating costs, prices charged and different service levels

Arguments of the parties

70 First, the applicant maintains that the difference between its operating costs and those of Aer Lingus shows that neither company exerts significant competitive constraints on the other. Ryanair’s lower cost base allows it to charge significantly lower prices than Aer Lingus and, thus, to serve a separate segment of the market. The Commission failed to analyse the impact of that difference on competition. Moreover, after observing that Aer Lingus’s operating costs are in line with those of low-fares carriers such as easyJet or Virgin Express, the Commission was not entitled to infer therefrom, in section 7.3.3 of the contested decision, that Aer Lingus was ‘among the closest competitors of Ryanair even in terms of unit costs’. Reliance on that notion of ‘closest competitors’ derives from an analytical error. Moreover, the Commission includes Aer Lingus’s long-haul flights in the calculation of Aer Lingus’s average operating costs. Since operating costs per kilometre are substantially lower on long-haul flights than on short-haul flights, their inclusion has the effect of significantly understating Aer Lingus’s average costs per kilometre for the purpose of comparison with low-cost carriers that operate only on short-haul routes. Furthermore, if, as the Commission contends, Aer Lingus’s average costs are comparable to those of low-cost carriers and only 50% or so higher than Ryanair’s, Aer Lingus should be able make substantially higher profits than Ryanair, because its average fare is over 100% higher than Ryanair’s. In reality, Ryanair is far more profitable than Aer Lingus.

71 Second, the applicant emphasises the difference between its prices and those of Aer Lingus. That difference is the result of the difference in the two companies’ costs and demonstrates a ‘high level of differentiation’. The Commission was wrong to consider, in recital 371 of the contested decision, that a price difference of EUR 30 is not significant, given that the average price of a Ryanair ticket is EUR 41. Ryanair’s lower prices, being less than half of Aer Lingus’s, enable it to attract customers who, in the absence of such moderate prices, would not fly at all. The Commission should have inferred from this that Aer Lingus exercised no competitive constraint on Ryanair. In recognising in recital 413 of the contested decision that Ryanair’s prices were on average lower than those of Aer Lingus, the Commission should have concluded that the two companies targeted two entirely separate segments of the market. Moreover, Ryanair and Aer Lingus operate on the basis of very different business models. Aer Lingus may indeed have moved away from the business model of the traditional full-service airline by adopting some of the traits of low-fare carriers. However, it continues to use primary airports and offer certain services that allow it to charge significantly higher fares than those of Ryanair. Aer Lingus customers are thus prepared to pay a supplement over the fares of its low-price competitors in order to get a wider range of services.

72 Third, the applicant claims that it is apparent from recital 367 of the contested decision that Ryanair is a ‘no-frills’ airline and Aer Lingus is a ‘mid-frills’ airline and the Commission attempts to minimise the impact of that difference on the degree to which the two companies compete. The Commission failed to analyse the extent to which those differences matter or to put forward convincing evidence to demonstrate why those significant differences are irrelevant for determining the existence of a significant impediment to effective competition. Such differentiation was evidenced by the statements of Aer Lingus and the Irish Government prior to the public bid, before the Government and the company ‘did a U-turn’, claiming that Aer Lingus was a low-fares carrier.

73 The Commission, supported by Ireland and Aer Lingus Group, disputes the applicants’ arguments by referring to the contested decision.

Findings of the Court

74 Although, in the contested decision, the Commission recognised the existence of differences between Ryanair and Aer Lingus, it did not draw the same conclusions as the applicant. Those differences did not prevent the Commission from finding that, of all the competitors which operate on the various routes affected by the concentration, Aer Lingus was Ryanair’s biggest and closest competitor.

75 As regards the difference in the operating costs of Aer Lingus and Ryanair, the latter reiterates its argument that the difference in costs enables it to serve a separate segment of the market. In the applicant’s view, the Commission should have analysed the impact of that difference on the competitive relationship between the two airlines.

76 However, it is apparent from the contested decision that the Commission recognised that Ryanair’s operating costs were lower than Aer Lingus’s, but also noted that, in relation to the other airlines, Aer Lingus’s costs were generally very low and situated the airline in the group of low-cost carriers rather than in the group of network airlines (see section 7.3.3, in particular recital 374).

77 The Commission thus set out in the contested decision the reasons why it considered, in the light of the information available, that Ryanair’s operating costs per kilometre were lower than 4 cents, whereas Aer Lingus’s were almost 5.9 cents. The Commission acknowledged that Ryanair’s objection that those figures also included Aer Lingus’s long-haul flights (which generally have lower operating costs per kilometre) was justified. However, it pointed out that 87% of Aer Lingus’s passengers travelled on short-haul flights and that the alternative figure put forward by Ryanair of almost 8 cents per kilometre was not substantiated (see section 7.3.3 of the contested decision, in particular recitals 375 and 377).

78 In any event, it is apparent from graph 1 set out in recital 375 of the contested decision that the operating costs per kilometre of a network airline (such as British Airways, Air France or Lufthansa) are almost 12 cents whereas those of Virgin Express or easyJet are in the region of 7 cents and just over 6 cents respectively. The margin defined by the Commission and Ryanair, of between 5.9 and 8 cents per kilometre, thus situates Aer Lingus in the same group as Virgin Express or easyJet, whose operating costs are ‘lower’ (recital 375) or ‘significantly lower’ (recital 376) than those of large network airlines (a difference of at least 4 cents per kilometre), even if they are ‘higher’ or ‘significantly higher’ than Ryanair’s (a difference which varies between 2 and 4 cents per kilometre).

79 Consequently, although there is a difference in operating costs between Ryanair and Aer Lingus, as the Commission recognised in the contested decision, that still does not support the applicant’s claim that the Commission could not consider that Aer Lingus and Ryanair are ‘closest competitors’, since Aer Lingus’s operating costs are actually lower than those of the network airlines and neither Virgin Express nor easyJet are in competition with Ryanair on the routes on which their services departing from Ireland overlap (recital 376 of the contested decision).

80 That observation is also supported in the contested decision by the finding that the evolution of Aer Lingus’s unit costs over time further highlights its ‘gradual migration’ from a traditional to a low-cost business model (see recital 378, in particular graph 2 on Aer Lingus’s operating costs over time from 2001 to 2005).

81 In addition, although, as pointed out by the applicant, low operating costs have an impact on the profitability of the undertaking (see paragraph 70 above), that still does not lead to the conclusion that the services which it offers are not in competition with those of Aer Lingus. The latter offers higher-end services while attempting to bring its business model into line with Ryanair’s cost structure, which differentiates it further from the cost structure of network airlines.

82 As regards the difference between the prices charged by Ryanair and those charged by Aer Lingus, the applicant submits that the difference is such that the Commission should have inferred from it that Aer Lingus did not exert a competitive constraint on it. According to the applicant, an average price difference of EUR 30 is significant, since the average price of a Ryanair ticket is EUR 41. In addition, Ryanair’s lowest prices, which are less than half the price of Aer Lingus’s, enable the applicant to attract customers who would not travel by aeroplane if such prices were not available.

83 Just as it recognised that there was a difference in the operating costs, the Commission recognised in the contested decision that there was a difference between the average prices charged by Aer Lingus and those charged by Ryanair. That point is not disputed by the parties.

84 However, it should be pointed out that, in the contested decision, the Commission stated, first, that although the prices charged by Aer Lingus were generally higher than those charged by Ryanair that was not always the case and, second, that the price comparison was made more delicate by the fact that it was difficult to know which taxes and charges had been taken into account in the calculation of the average price of short-haul flights indicated by Ryanair, of EUR 41 for 2006, when, for Aer Lingus, an average price was given of EUR 91, or of between EUR 65 and 75 before charges and taxes (see section 7.3.2, in particular recital 371 and footnotes 385 and 386).

85 In the light of the above, it should be noted that the dispute relating to the average prices charged by Ryanair and Aer Lingus concerns the consequences of that price difference. Although the applicant claims that the price difference enables the finding that Aer Lingus does not exert a competitive constraint on Ryanair, the Commission considers that it is apparent from the analysis of the prices charged that Aer Lingus is closer to Ryanair than any of the other competitors operating on the routes on which their services overlap could be (see recitals 368 to 370 of the contested decision in relation to the assessment of the economic model, which is then reproduced in recital 371 in relation to the comparison of average prices in the following terms: ‘[t]he same consideration applies to the fact that Aer Lingus’s average prices are higher than Ryanair’s prices’).

86 As regards the competitive constraint exerted by Aer Lingus, that issue is dealt with in section 7.4 of the contested decision, which concerns the competition between the parties to the concentration at the material time, and in sections 7.5, 7.6 and 7.9, in which the Commission examines the effects of the concentration on competition. That issue is thus not dealt with in section 7.3, in which the Commission set out the reasons why it considered that Ryanair and Aer Lingus were ‘closest competitors’ on all of the relevant routes.

87 Consequently, the findings made in recital 371 of the contested decision provide a basis for the Commission’s conclusion in section 7.3 in the sense that it is apparent from the information set out therein that the prices charged by network airlines, communicated by Ryanair, which offer a full on-board service are much higher that those charged by Aer Lingus (EUR 216 for Air France, EUR 225 for Lufthansa and EUR 268 for British Airways). Ryanair’s and Aer Lingus’s prices are indeed ‘well below the price level of the competitors they face on the respective routes’ (recital 371). The Commission also explained that the difference in prices charged by Ryanair and those charged by Aer Lingus made it necessary to take account of some quality advantages associated with Aer Lingus’s service, such as the fact that it serves primary airports, offers business lounges and higher service orientation (recitals 371 and 372). The analysis made in the contested decision of the prices charged by Ryanair and Aer Lingus thus provides a basis for the Commission’s conclusion that Ryanair and Aer Lingus are ‘closest competitors’ on all of the relevant routes.

88 According to the applicant, such an analysis is not compatible, however, with the finding made in the second sentence of recital 413 of the contested decision, which states:

‘The factors detailed above [in relation to the customer perception of Aer Lingus and Ryanair (section 7.3.5)] clearly indicate that Ryanair and Aer Lingus are close competitors. The Commission nevertheless acknowledges that Ryanair has on average lower prices than Aer Lingus, and that, at least hypothetically, it would be possible that Aer Lingus and Ryanair serve two entirely separate consumer segments.’

89 That reference to a possible segmentation of demand on the basis of the prices charged does not, however, lead to the conclusion that Ryanair and Aer Lingus are not close competitors. The concept of ‘competitor’ is to be assessed on the basis of the information available in the case. Various factors are put forward by the Commission in support of that finding, with which it concludes section 7.3 of the contested decision. It should be noted, for example, that, on the 22 routes on which Ryanair and Aer Lingus are the only airlines in operation, at present there are no other airlines in a position to offer scheduled air transport services. On those markets, whose definition is not disputed as such by the applicant (see, however, in relation to the argument concerning destination airports, paragraph 95 et seq. below), Aer Lingus thus remains Ryanair’s closest competitor. The issue of entries onto the market will be examined along with the second plea in law, which is devoted to that issue.

90 As regards the difference in the level of services, the applicant’s argument merely reiterates a difference already known to the Commission and which is referred to in the contested decision. For example, in recital 367, although the Commission regarded Ryanair flights as ‘no-frills’ flights and Aer Lingus’s services as ‘mid‑frills’, it stated immediately afterwards that, for the purposes of the contested decision, ‘both airlines [could] be considered “low-frills” carriers’, since following the latest adaptations of Aer Lingus’s service model, the services included in the Aer Lingus base fare are broadly in line with those included in the Ryanair base fare and in stark contrast to traditional “full service” airlines such as British Airways or Lufthansa’.

91 In its written submissions the applicant recognises, inter alia, that ‘Aer Lingus may indeed have moved away from the business model of the traditional full-service airline by adopting some of the traits of low-fare carriers’ (see paragraph 71 above). That point was confirmed at the hearing.

92 In any event, the evolution of Aer Lingus’s unit costs over time further highlights its ‘gradual migration’ from a traditional to a low-cost business model (see paragraph 80 above) and the services which Aer Lingus provides are situated, at the very least, between those provided by Ryanair and those provided by network airlines which offer a full on-board service.

93 Consequently, even if Aer Lingus does not have the very low operating costs of Ryanair, does not charge the same prices as Ryanair and does not offer as few services, the fact remains that Aer Lingus is restructuring its business model to resemble that of its competitor.

94 Therefore, the applicant does not show to the required legal standard that the Commission wrongly concluded in recital 431 of the contested decision that Aer Lingus and Ryanair were ‘closest competitors’ on the relevant routes out of Ireland. That conclusion may thus be taken into consideration in the examination of the effects of the concentration on competition and the criticisms advanced by the applicant on this point must be rejected (see paragraphs 58 and 63 above).

c) The difference between the destination airports

Arguments of the parties

95 First, the applicant claims that Ryanair and Aer Lingus use fundamentally different types of airport. Aer Lingus uses primary airports that are closer to city centres and offer better services and are therefore more expensive than secondary airports. Secondary airports, used by Ryanair, enable it to keep its costs low and prevent it from competing against Aer Lingus for passengers wishing only to use primary airports. By acquiring Aer Lingus, Ryanair would be in a position to compete in the primary airports. According to the applicant, the Commission failed to produce clear and convincing evidence to show that Aer Lingus flights to primary airports and Ryanair flights to secondary airports exercised significant competitive constraint on each other. The data relied on in the contested decision do not support the conclusion that those flights are sufficiently close substitutes to require them to be included in the same market. Moreover, the Commission used the information available ‘in a highly selective and inconsistent manner’. Having been unable to find any uniform set of criteria, it instead assembled several different criteria and then foraged among those numerous indicators to find any criterion to justify a finding that the primary and secondary airports were in the same market. The Commission ignored or distorted the opinions of Birmingham and Vienna Airports and of the UK Civil Aviation Authority in order to conclude that primary and secondary airports are substitutable. It thus did not use reliable evidence or robust methodology. Furthermore, although the Commission presented the responses of competitors to claim that those airports were substitutable, those responses demonstrate on the contrary that there was no clear and convincing evidence on that point (see response of British Airways and the situation of the London airports). It was unclear from the table addressed to the competitors whether respondents were expected to mark airports as suitable for each type of passenger or as substitutes for each other. In some cases, airlines made a mark against only one of the airports in each city pair, highlighting the confusion.

96 Second, the applicant claims that the Commission’s use of airport catchment areas as a basis for determining whether flights to different airports belong to the same market is flawed. The Commission uses an unsubstantiated ‘rule of thumb’ which defines an airport’s catchment area as the area within either 100 kilometres or within a one hour drive from the airport (recital 83 of the contested decision). That rule is ‘far too vague to be useful’, in so far as it fails to recognise the actual distribution of passengers within the area and is unrealistic in the context of routes between Ireland and the United Kingdom, where all the flights are no more than one hour. The Commission thus worked on the false assumption that passengers ‘would bypass their nearest airport, drive for an hour and then catch a flight of perhaps 50 minutes or so’. Moreover, the calculation of the time necessary to reach an airport by public transport or by car, set out in recital 78, takes no account of the various delays or of the cost associated with using public transport. Finally, the Commission does not take account, in recitals 114 to 116, of the real figures for the specific airports in question, in particular regarding the data from the UK Civil Aviation Authority.

97 Third, the applicant criticises certain assessments or findings set out in the contested decision. First of all, it complains that in recital 92 the Commission took into account the marketing practices of Ryanair whereby it presents Ryanair flights as substitutes for flights to primary airports. The marketing labels used by an undertaking for its products do not, in its view, constitute a sufficiently safe or sound basis for defining markets. For example, Vienna and Bratislava Airports cannot belong to the same market simply because Ryanair markets its service to Bratislava as a service to ‘Bratislava (Vienna)’. Next, the applicant claims that in recital 99 the Commission should not have used the concept of ‘airport system’ referred to in Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes (OJ 1992 L 240, p. 8) to support the view that certain airports are substitutable. That system was not designed for the purpose of market definition and the recasting of Regulation No 2408/92 and its associated regulations should end that approach to airport systems. The applicant also submits that the Commission’s price analysis is ‘flawed’ and does not provide reliable grounds for the conclusion that Aer Lingus flights into primary airports and Ryanair flights into secondary airports are ‘close substitutes’. The analysis provides no way to identify whether co-movement of prices is due to substitutability or to common influences. Finally, the applicant maintains that the passenger survey is ‘seriously flawed’ both in terms of the design of the questions and the sampling techniques employed. It was not designed to measure substitutability between airports, since passengers were never asked whether they envisaged flying to different destination airports. In numerous cases, the data relied on by the Commission in that regard actually indicate the opposite conclusion.

98 The Commission, supported by Ireland and Aer Lingus Group, disputes the applicant’s arguments by referring to the contested decision.

Findings of the Court

99 In its written pleadings the applicant reiterates the arguments which it raised during the administrative procedure to criticise the definition of the relevant market on the basis of the city of origin and the city of destination. Those arguments were examined and dismissed by the Commission in the contested decision and their mere repetition before the Court cannot, for the reasons set out below, suffice to call that analysis into question.

100 As regards the complaint that the Commission failed to produce clear and convincing evidence to show that Aer Lingus flights to primary airports and Ryanair flights to secondary airports exercised significant competitive constraint on each other, it should be pointed out that that complaint essentially amounts to a criticism of the Commission’s use of the market as defined in the contested decision in order to assess the effects of the concentration on competition within the relevant markets. The applicant recognises this implicitly when it claims that the data relied on in the contested decision ‘do not support the conclusion that those flights are sufficiently close substitutes to require them to be included in the same market’ (see paragraph 95 above).

101 In that regard, it should first be noted that the scope of that complaint needs to be put into perspective in the light of the fact that, on 16 of the 35 relevant routes, Ryanair and Aer Lingus serve the same airports (recital 71 of the contested decision). Therefore, that complaint concerns only 19 of those 35 routes (that is 54.2% of them) and thus has no relevance to the other 16 routes affected by implementation of the concentration.

102 In relation to those 19 routes, the applicant merely complains that the destination airports are different but without seeking to refute, in concrete terms, the reasoning set out in the contested decision in relation to the impact of that difference on both the definition of the market and the assessment of the effects of the concentration on competition. The Court points out that, in the contested decision, the Commission noted that the markets for passenger air transport could be defined on the basis of individual routes or a bundle of routes, to the extent that there is substitutability between them according to the specific features of the case (recital 55 and the case-law cited in footnote 53, in particular Case T‑177/04 easyJet v Commission [2006] ECR II‑1931, paragraphs 54 to 61).

103 In that regard, it should be noted that the Commission drew up, first of all, an analytical framework for the definition of the relevant market for the various relevant routes, irrespective of whether airport pairs or city pairs were being analysed (section 6.3.3 of the contested decision). The different criteria used to characterise the substitutability of scheduled air transport services departing from different airports are set out in recital 99. Those criteria are as follows: distances and travelling times using the indicative benchmark of 100 km or one hour driving time, the views of competitors, the views of the airports concerned and of Member States’ civil aviation authorities, the estimated proportion of leisure passengers on a route, the so-called ‘airport system’ pursuant to Annex II to Regulation No 2408/92, marketing practices, whether transport services exist between the secondary airports and certain cities, and the result of the Commission’s price correlation analysis for 17 city-pair routes out of Dublin.

104 Next, the Commission analysed in detail the relevant market on each of the routes at issue (section 6.3.4 of the contested decision). For each of the cases in which it found there to be substitutability, the Commission applied various criteria on the basis of the information available. In its view, the choice of passengers to opt for one airline or the other is the result of a combination of those factors.

105 On the other hand, the Commission came to the conclusion on various occasions that flights to different destination airports situated close to the same city did not fall within the same market. In recitals 178 to 183 of the contested decision, the Commission essentially considered, in particular, that Rennes and Nantes Atlantique airports were not substitutable for the following reasons: they were slightly outside the benchmark of 100 km or one hour driving time, Ryanair does not market its service to Nantes with reference to Rennes, and vice-versa, there are no significant differences between the two airports which would be an incentive for passengers located in Rennes to travel to Nantes for a flight, and vice versa, and the available data was not sufficient for the Commission to conduct a meaningful price correlation analysis. The mere fact that Aer Lingus regards Rennes and Nantes Atlantique airports as substitutes was not sufficient, in the Commission’s view, to conclude that they are substitutable. In recitals 197 to 203, the Commission also made a distinction between Amsterdam Schiphol and Eindhoven for the same reasons as those given in relation to Nantes Atlantique and Rennes airports and because it had considered in an earlier decision that there was a low degree of substitutability (Commission decision of 22 September 1997, Case COMP/M.967 – KLM/Air UK, paragraph 24).

106 In addition, it should be noted that the point of view of the airports is also given at various points in the contested decision (see, for example, recitals 132, 145 and 151), as is the point of view of the UK Civil Aviation Authority (see, for example, recitals 128 and 138). As regards the reference to the distinction between time‑sensitive and non-time-sensitive passengers made by the UK Civil Aviation Authority, the Commission gave several reasons in the contested decision why that distinction could be regarded as irrelevant in this case (recitals 85 and 316 to 319).

107 In particular, the Commission stated, in a convincing manner, that that formerly clear distinction between the two categories of passenger had become increasingly blurred. That tendency had already been referred to by the Commission in previous cases (Cases COMP/M.3280 – Air France/KLM and COMP/M.3770 – Lufthansa/Swiss, referred to in footnote 329 of the contested decision) and was confirmed in the responses to the questionnaires sent to competitors on 6 November 2006 (the responses referred to in footnote 328), which the applicant in the present case does not dispute. The responses of the corporate customers during the Commission’s investigation show that the best fare criterion is also quite important. In the order of importance expressed by those customers, that criterion ranked above the criterion of closeness of airport to final destination and below that of best time, which has become less absolute in the light of the high number of flights often provided by no-frills airlines (recital 316 of the contested decision).

108 In addition, as regards the opinions of Birmingham airport (recital 138 of the contested decision) and Vienna airport (recital 223), the applicant does not state how exactly those opinions were distorted. In addition, at the hearing the applicant expressly waived its right to expand on that argument. Those opinions, which do not come to the conclusion that there is substitutability, are faithfully reproduced in the contested decision and the Commission was also in possession of other information capable of supporting the conclusion which it arrived at in the contested decision. The technique used by the Commission of bundling evidence to assess a concentration may, of course, include positive and negative factors. The conclusion which the Commission arrived at following its analysis of the various factors taken into consideration cannot be called into question simply because a negative factor also emerges from the investigation. That factor is duly noted and was taken into account by the Commission and, contrary to what the applicant asserts without demonstrating its assertion in any other way, was not distorted.

109 In addition, contrary to what the applicant claims, it is apparent from the response given by British Airways to the questionnaire sent by the Commission that, as regards the London airports, ‘there [was] very significant overlap in the catchment areas and all London airports [could], and do, compete with each other for both [long-haul] and [short-haul] traffic’. It is also apparent that, as regards the other airports on the list set out in question 22 of that questionnaire, British Airways considers that it ‘would generally conclude that all of the airports listed do compete for all passengers’. As regards the claim that the responses of the competitors do not show that all the primary and secondary airports were substitutable, in relation to London in particular, the responses of Ryanair’s competitors on that route prove the contrary.

110 As regards Ryanair’s criticism in relation to the use of a ‘rule of thumb’ to define the catchment zones of airports in order to determine the relevant markets, the Commission acknowledges the approximate nature of that rule in the contested decision (recital 83: ‘It should, however, be noted that the Commission uses the 100 km [or] 1 hour-“rule” only as a first “proxy” to define a catchment area. Due to the specificities of the respective airport and other evidence, the catchment area may be wider in reality and will therefore be discussed in greater detail on a case by case basis in the individual airport pair analysis’).

111 In response to Ryanair’s criticism in that regard concerning the statement of objections, the Commission noted in the contested decision that the 100 km or one hour driving time benchmark was a proxy based on the results of the view of airports on what they considered to be a reasonable catchment area (recital 85). It is apparent from the responses to the questionnaire sent to the airports that the catchment area which airports present to airlines is at least 100 km or one hour driving time if not more (recital 82). In addition, as stated by the Commission in response to the arguments raised by the applicant in its written pleadings, the fact that the duration of flights on routes between Ireland and the United Kingdom is relatively short does not alter that assessment in any way. In many cases, there are special bus services which link secondary airports to the city centre with a timetable which is adapted to the flight times. The Commission’s approach is consistent with the reply of the UK Civil Aviation Authority.

112 In the light of the above factors and explanations, the Commission cannot be criticised for having used the 100 km or one hour driving time benchmark in defining the catchment areas of the airports.

113 As regards the criticism that in recital 92 of the contested decision the Commission took into account the way in which Ryanair markets itself by presenting its flights as alternatives to flights to principal airports, it must be noted that such marketing was just one of the many factors which were taken into account. Such a practice is intended to make it easier for customers who might be interested in booking a flight with Ryanair to identify the flight destinations available. That cannot be called into question merely because Ryanair asserts, without any other demonstration, that the names under which it markets its services to certain airports do not constitute a sufficiently certain and solid basis on which to define markets. That assertion cannot suffice to deny that element any relevance in the set of factors used by the Commission. As regards the example of Vienna and Bratislava referred to by the applicant, the Commission based its assessment also on other factors and not just Ryanair’s marketing practice. It also examined the indicative benchmark of 100 km or one hour driving time, the point of view of the national authorities and of the competitors and the results of the customer survey (section 6.3.4.15). In addition, the Commission based its findings, in its route-by-route analysis (section 6.3.4), on the 100 km or one hour driving time benchmark, on the point of view of the national authorities and of the competitors and the results of the customer survey. The Commission’s assessments in that regard are always based on the use of a set of factors which it sets out and analyses individually.

114 In relation to the criticism regarding the reference made, in recital 99 of the contested decision, to the ‘airport system’ used in Regulation No 2408/92 to support the finding that certain airports can be regarded as substitutable, it is apparent from that recital that the fact that the airports at issue belong to an ‘airport system’ within the meaning of Regulation No 2408/92 provides ‘supplementary evidence which supports the finding that airports listed under that regulation belong to the same conurbation and can be considered substitutable from the demand side’. In Regulation No 2408/92, which was in force at the time the contested decision was adopted, the airport system is defined as meaning ‘two or more airports grouped together as serving the same city or conurbation, as indicated in Annex II’. Therefore, the fact that two or more airports are mentioned in Annex II as an airport system may be taken into account when determining whether those airports serve the same destination, which is a factor indicating that those airports are substitutable for passengers wishing to travel to a given destination. That assessment cannot be called into question by the fact that the Commission took the initiative to clarify and simplify the rules on traffic distribution between airports serving the same city or conurbation, its proposal to that effect having since been adopted by the European Parliament and the Council of the European Union. In Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (Recast) (OJ 2008 L 293, p. 3), which, since the adoption of the contested decision, has repealed Regulation No 2408/92, reference is still made to the principle of traffic distribution between airports serving the same city or conurbation, even if the expression ‘airport system’ is no longer used.

115 In relation to the criticism of the price correlation analysis carried out during the administrative procedure, it should be noted that the Commission recognises that the price correlation does not prove that two airports fall within the same market. However, the Commission correctly submits that such a factor, together with others, constitutes a relevant factor for the analysis. According to the contested decision the Commission’s analysis is an ‘empirical analysis’ (recital 121). The footnote under recital 121 also states the following:

‘It is important to note with respect to all the analysed city pairs that the Commission has taken the economic evidence on price correlation into account as additional elements that support its view. … This is because prices movements may be influenced by other factors which can lead to low price correlation.’

116 That is the context in which the assessments made in the contested decision on the basis of the results of the ‘empirical analysis’ of the price correlation must be taken into account. The Commission can thus not be criticised for having set out the reasons why the price correlation analysis could lead to limited results while stressing at the same time that those results, as limited as they might be, could none the less be taken into consideration under certain conditions.

117 In those circumstances, the applicant does not show precisely how the Commission exceeded the limits of its powers of appraisal of economic situations (see paragraphs 31 and 32 above). The criticism made in that regard by the applicant is general and fails to take account of the use made by the Commission of the results of the price correlation analysis.

118 In relation to the criticism of the results of the passenger survey, it should be noted that that point was also raised by the applicant in the context of another argument and will be examined with that argument (see paragraph 202 et seq. below). In any event, it is apparent from recital 94 of the contested decision that the Commission was fully aware of the limits of the customer survey carried out at