On 20 January 2014, the European Commission published its decision of 17 October 2013 to reject a complaint by the airline operator Ryanair against the Dublin Airport Authority ("DAA") and Aer Lingus Group Plc ("Aer Lingus") regarding alleged breaches of Articles 101 and 102 TFEU in connection with airport services at Dublin airport.
In its complaint of 22 February 2011, Ryanair claimed that the DAA, the Irish state-owned company responsible for the management and development of certain airports in Ireland and the owner and operator of Dublin airport, colluded with the airline operator Aer Lingus to reward the latter for its move to a newly-constructed terminal building, Terminal 2, at Dublin Airport. As part of such collusion, Ryanair claimed that the DAA increased airport charges for the airlines remaining at Terminal 1. According to Ryanair, the DAA carried out excessive investments to upgrade and refurbish Terminal 1 in order to be able to justify the increase of airport charges for airlines operating from this terminal to the same level as the airport charges for those operating from the new Terminal 2. Ryanair operates exclusively from Terminal 1 and is the main user of a newly-constructed pier at this terminal, while Terminal 2 is the main terminal for Aer Lingus and a number of long-haul network airlines
Ryanair also argued that the DAA abused its dominant position on the market for airport services in the catchment area of Dublin airport by: (i) increasing the airport charges for airlines operating at Terminal 1 and not differentiating between the two terminals; (ii) introducing a so-called Transfer Incentive Scheme which offers a financial incentive to all airlines selling through-tickets to transfer passengers flying via Dublin to their destination; and (iii) applying differentiated pricing for the use of contact stands and remote stands at Dublin airport, with lower charges for the latter. According to Ryanair, these practices constitute four different forms of abuse, namely excessive pricing, discrimination, bundling and a manifest failure to satisfy demand.
In its decision rejecting the complaint, the Commission first noted that, although the investments into Dublin airport provide relevant background to the alleged infringements, it is not the role of the Commission to assess whether such investments were well-founded, and that a bad business decision by the DAA based on the information available at the relevant time (such as capacity shortages and rising passenger numbers) would not, in itself, make the behaviour abusive.
The Commission further found that the complaint did not contain any indications other than speculation that would point towards a common plan or coordination between Aer Lingus and the DAA to reward Aer Lingus for its move to Terminal 2, and considered that the DAA's charging policy, the Transfer Incentive Scheme and the charges for using remote stands did not seem to amount to collusion against Ryanair contrary to Article 101 TFEU.
As regards Ryanair's allegations of breaches of Article 102 TFEU, the Commission did not consider it necessary to take a position on the issues of the relevant market definition and the existence of a dominant position by DAA since this would not change its conclusions with respect to the alleged abuses.
With regard to the DAA's alleged abusive behaviour by introducing its Transfer Incentive Scheme and remote stand policies, the Commission held that, other than mere allegations, Ryanair's complaint did not contain any explanations that would clarify how these policies constituted an abuse. Instead, the Commission pointed out that its investigation indicated that the Transfer Incentive Scheme and remote stand policies are based on legitimate business decisions not targeted against Ryanair. The Commission also stated that it found it difficult to understand why the DAA would be incentivised to favour certain of its customers at the expense of others.
With respect to Ryanair's argument that the DAA's airport charges were excessive, the Commission held that Ryanair did not adduce any evidence indicating that the charges were not based on the actual costs incurred by the DAA through its airport investments, and noted that Ryanair instead appeared to argue that the charges were excessive in relation to what Ryanair actually desired, which it noted was not a relevant factor for establishing excessive pricing.
As regards Ryanair's claim that the DAA discriminated against it by levying the same set of charges on the users of the two terminals despite the considerable differences between the terminals, the Commission first noted that the possibility of differential pricing was already subject to extensive discussions in Ireland before the DAA decided not to require differential prices in relation to airport charges at each terminal. The Commission further held that Ryanair falsely gave the impression in its complaint that Terminal 1 is only used by low fare airlines that would not need most of the services available at this terminal, while Terminal 2 is used by long-haul network airlines that all require these services. The Commission therefore found it misleading for Ryanair to claim that, through the non-differentiated passenger charge, users of Terminal 1 were subsidising services that benefit only airlines at Terminal 2. Finally, the Commission found that the airport charges and the pricing practice of the DAA do allow low fare airlines to take into account specificities of their business model, for example by applying different charges for aircraft parking depending on the size of the aircraft.
As regards Ryanair's claim that the DAA was engaged in unlawful tying or bundling by requiring low fare airlines to use improved facilities with services that they did not require, the Commission noted that, after the construction of Terminal 2 and the upgrade of Terminal 1, the previous level of service received by users of Dublin airport was no longer available – thus the change was irreversible. As a result, the Commission concluded that the current services at Dublin airport do not represent separate products as required by EU case law on tying or bundling. Furthermore, the Commission held that, for tying or bundling to occur, the dominant company must be liable to foreclose competition, and concluded that it did not because the DAA was not in competition with the airlines using the airport. The conclusions that tying is not abusive if it is "irreversible" (presumably meaning practically irreversible, as it would seem possible for the DAA to undertake additional investments to restore the airport to its previous state) or if it causes foreclosure on a separate market on which the dominant firm does not operate are surprising, and it will be interesting to see if the Commission applies such factors consistently in future cases.
Finally, with regard to Ryanair's argument that the DAA fails or refuses to satisfy the demand of low fare airlines and their passengers by introducing a higher specification of terminal facilities at a higher cost, the Commission considered it unlikely that this was the case. The Commission emphasized that Ryanair obtains airport services which allow its operations, and that the DAA's pricing structure enables it to accommodate the needs of various airline business models. According to the Commission, the mere fact that a service is not provided at a price that is considered appropriate by a customer does not result in an abusive and manifest incapability to satisfy demand.
The Commission concluded that it would be disproportionate to further investigate Ryanair's claims, in particular in light of the limited likelihood of establishing an infringement, and rejected Ryanair's complaint in its entirety.
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