IS THE AIRLINE INDUSTRY A NATURAL MONOPOLY 199 especially in the airlines market, where the question of entry remains one of the most important points to assess. Slots at congested airports are significant assets, explaining why traditional FSCs tended to defend their historical position from their hubs. As regards competition between FSCs, their rather long history and the creation of large interconnected networks probably hampered the potential for fierce competition. This context of barriers to entry clearly increases the assumption for mutual forbearance. The EU antitrust enforcement approach is based on the regulation of the market in the presence of a dominant position and in the existence of barriers to entry. It will follow three fundamental principles: fair competition (supply-side), consumer welfare (demandside) and EU internal market integration (industrial policy). Anticompetitive effects will occur when an airline deters potential competitors and harm consumers (consumer welfare) through higher fares or lower choice and quality. The EU Commission and General Court will also prevent the creation of monopolies or dominant position on the Member States’ territory (EU internal market integration). This general approach by the EU Commission was criticised as it would confuse “the current unwillingness of competing carriers to enter into the […] market because of low demand with their ability to do so because of the absence of barriers to entry”62. In other words, under the features of the theory of contestable markets, entry would always be possible if there is enough demand from consumers. A more efficient carrier (cost, price, quality, innovation) will be able to enter a market if barriers to entry are low and if the demand is growing. In the future, the EU Commission will probably need to answer more accurately about the question of monopoly pricing. Would it be possible for a carrier (especially a LCC) to be in a monopoly situation and not to harm consumers or potential competitors? So far, the EU Commission and the General Court stated that a firm’ rational and likely behaviour, in the absence of actual and potential competition, would be to take advantage of this situation, seeking to increase its profits. The EU Commission stated that “If Aer Lingus did not exist, the temptation would be great for Ryanair to maximize its profits to take account of the lack of competitive pressure resulting from the acquisition of its main actual or potential competitor on the relevant markets63”, which remains in line with the EU’s classical approach. Nevertheless, specific business models, such as 62 Response to the Decision opening proceedings, para 121. 63 ECJ, Case T-342/07 Ryanair Holdings plc v Commission, 6 July 2010; para 251.
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