IS THE AIRLINE INDUSTRY A NATURAL MONOPOLY 197 barriers to entry on the territory of a few Member States which would have deterred potential competitors. The underlying risk was also that national monopolies encourage mutual forbearance. If each Member State is able to structure its airline sector around only one main carrier on its primary airport, there is a risk that each carrier will focus and protects its own territory in adopting predatory practices. According to the mutual restraint assumption, each carrier would then tend to avoid fierce competition in other national markets and main bases. From the political point of view, the justification of European air transport liberalisation process could have been questioned. CONCLUSION The EU antitrust enforcement practice, viewed through the key theories of airline economics, provides a broader comprehension of the airline markets even though law and economics do not follow the same path. The airline economics tends to look at the industry as a whole and searches for universal mechanisms, whereas the competition authorities have to face case-by-case competition issues. The competition authorities or courts’ role is not to find what the underlying economic nature of the industry is, and the EU General Court made it clear that the evaluation of entries and exits is “based on a targeted assessment on the affected markets and not on the air transport sector in general”59. Even though the airline industry is probably neither a perfectly contestable market nor a natural monopoly, airline economics help highlight the fundamental trends at stake within the industry’s competitive process.The choice between the competitiveness of airlines (more concentration) and competition within airlines markets lies at the heart of EU antitrust enforcement. For the EU Commission and General Court, competitiveness and competition can coexist. Concentration can lead to cost savings and positive externalities unless it creates barriers to entry that would deter potential competitors, harm consumers or impede the EU internal market. 59 See EU General Court in Ryanair/Aer Lingus, points 242 and 243: “The applicant contests the Commission’s analysis in the contested decision in relation to the issue of the entry onto the markets at issue, by submitting that the air transport sector in Europe has been characterised by lively entry and exit since it was deregulated. That argument is too general to illustrate how exactly the Commission’s analysis was erroneous. That analysis does not relate to the air transport sector, but focuses, in particular, on the 35 routes on which the services out of Ireland of the parties to the concentration overlap”. Ryanair/Aer Lingus III (2003), paragraph 653: “The General Court thereby upheld the Commission’s approach that consisted in basing the evaluation of competition and the entries on a targeted assessment of the affected markets and not on the air transport sector in general”.
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