The European Commission has sent a Supplementary Statement of Objections to Lufthansa indicating the Commission's intention to order the airline to reinstate Condor's access to Lufthansa's feed traffic to and from Frankfurt airport under the conditions the two airlines agreed upon in June 2024.
This is a step in the Commission's procedure related to interim measures in the context of its broader investigation into a potential restriction of competition on transatlantic routes to/from several European Economic Area ('EEA') airports by the A++ transatlantic joint venture ('JV') between Lufthansa, United and Air Canada.
In today's decision, the Commission has preliminarily found that the A++ transatlantic JV restricts competition on the Frankfurt-New York route and that the adoption of interim measures enabling Condor to continue offering its services on that route is warranted to prevent serious and irreparable damage to competition from occurring in that market.
The Commission's investigation into the A++ transatlantic JV
In May 2013 , the Commission accepted commitments from Air Canada, United and Lufthansa to address its preliminary concerns that the A++ transatlantic JV may restrict competition for the provision of air transport services to premium passengers on the Frankfurt-New York route. The 2013 commitments consisted notably of making slots and feed traffic available to competitors willing to enter or expand on the Frankfurt-New York route. These commitments were legally binding for 10 years.
On 7 August 2024, the Commission initiated proceedings against Lufthansa, United and Air Canada to investigate a potential restriction of competition by the A++ transatlantic JV on transatlantic routes to/from several EEA airports, in breach of Article 101(1) of the Treaty on the Functioning of the European Union ('TFEU') and/or Article 53 of the EEA Agreement.
On the same day, the Commission sent Lufthansa a Statement of Objections where it preliminarily concluded that interim measures may be required to ensure the effectiveness of any final decision taken by the Commission in the future.
The Commission's interim measures
Independently of the 2013 commitments, Lufthansa and Condor concluded several agreements allowing Condor to access, at special conditions, Lufthansa's short-haul network to feed its long-haul flights (the 'special prorate agreements' or 'SPAs'). In 2021, Condor started competing on the Frankfurt-New York route, and its operations on the route have expanded since then thanks to, in particular, its access to Lufthansa's short-haul network based on the SPAs.
In 2020, Lufthansa notified Condor of the termination of their SPAs. Lufthansa and Condor nevertheless put in place transitional SPA-based arrangements for the continued provision by Lufthansa of feed traffic to Condor which, following various judgements by German Courts, ceased to apply in December 2024.
In this context, the Commission had preliminary concerns that without the SPA-based arrangements Condor may no longer be capable of operating sustainably on the Frankfurt-New York route and be forced to definitively exit. This would likely lead to the further deterioration of the competitive structure on the market for the provision of air transport services on the Frankfurt-New York route, which is already negatively affected by the A++ transatlantic JV due to the loss of competition between the JV partners.
The Commission has therefore decided to follow up on its August 2024 Statement of Objections with a Supplementary Statement of Objections preliminarily finding that, at first sight, the A++ transatlantic JV restricts competition for the provision of scheduled passenger air transport services on the Frankfurt-New York route and that interim measures are warranted to prevent serious and irreparable damage to competition from occurring in that market.
To ensure the effectiveness of any final decision following the full investigation into the A++ transatlantic JV, today's Supplementary Statement of Objections considers that Lufthansa should reinstate the SPA-based arrangements for the provision of feed traffic to Condor to and from Frankfurt airport the two airlines agreed upon in June 2024.
Background
Lufthansa, headquartered in Germany, is a global full-service carrier with domestic and international operations in passenger and cargo air transport. It operates a network with hubs at Frankfurt, Munich, Brussels, Zurich and Vienna airports. Lufthansa is a member of the A++ transatlantic JV and the Star Alliance.
Condor, headquartered in Germany, offers short- and long-haul air transport passenger services. Condor operates scheduled and charter flights from German airports to destinations in the Mediterranean, Asia, Africa, North America, South America and Caribbean. Its main base is at Frankfurt airport.
The A++ transatlantic JV includes Lufthansa, United and Air Canada. The JV partners cooperate on pricing, scheduling, capacity and marketing on transatlantic routes linking their hub airports, as well as on routes that connect those hubs to certain 'behind and beyond' destinations in Europe and North America.
Feed traffic refers to passengers who in their journey stop in a hub airport to connect to long-haul flights. Essentially, the short-haul flight "feeds" passengers into the long-haul network, allowing the airline to fill its long-haul aircraft with more passengers. The main types of agreements covering the provision of feed traffic are: (i) IATA standard interlining agreements; (ii) SPAs; (iii) codeshare agreements; and (iv) alliance memberships.
Procedural background
Article 101 TFEU and Article 53 of the EEA Agreement prohibit agreements and concerted practices which may affect trade and prevent or restrict competition. The implementation of Article 101 TFEU is defined in Regulation 1/2003 .
Pursuant to Article 8(1) of Regulation 1/2003, interim measures may be imposed if, at first sight, there is an infringement of competition law rules, as well as an urgent need for protective measures due to the risk of serious and irreparable damage to competition.
There is no legal deadline to complete an antitrust investigation. Its duration depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission, and the exercise of the rights of defence.
