174 COMPETITION LAW IN TOURISM traffic substitution (passengers that would otherwise travel on other airlines). LCCs grew from 3% in 2001 to 27% of the scheduled passenger in 20153. In this fast-changing context, competition authorities have to face challenging questions about the very nature of airline competition. The enforcement of the EU antitrust law regarding mergers is particularly worthy of interest because it is based on a prospective analysis. The legal reasoning in these cases takes into account several factors, including the probability of behaviour of a carrier (entry or exit) given a particular market structure. As airlines have entered a new area, the question arises whether airline economic theories can highlight, from a different angle, the specific dynamics of the airline sector in the legal assessment made by competition authorities. 1. OVERVIEW 1.1. EU Competition Law and Economics Within the scope of economics, competition tends to be a subject of industrial organisation, productivity gains, surplus or global welfare, which relates to business efficiencies, welfare economics, wealth or social welfare. From a legal perspective, the EU competition law is a subject matter of more comprehensive values and supra-legal principles, such as internal market integration and ordoliberal social justice. On that respect, economic and social welfare are not fully aligned with social justice. The EU competition law is also sustained by a core of non-economic values: “there is a residual non-welfare related view of the objectives of EU competition law that would value the protection of the competitive process for deontological, rather than for consequentialist reasons”4. Market dominance can be seen as preventing social justice, even though economic wealth could emerge for the society as a whole. On the supply-side, the market should provide equal opportunities to compete and a global environment that would incentivise firms for investment and innovation to all the competitors. On the demand-side, consumer welfare should be protected against market dominance, unilateral behaviour and pricing, and a part of the producer surplus should be transferred to the consumer through lower fares, higher quality and access to innovation. From a political standpoint, the EU aims at promoting the 3 Burghouwt, & al.; Discussion Paper 2015-04 – OECD/ITF 2015. 4 Lianos, 2013, “Some Reflections on the Question of the Goals of EU Competition Law”, Centre for Law, Economics and Society (CLES), Working Paper Series.
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