200 COMPETITION LAW IN TOURISM aggressive LCCs models, are deeply linked to the pledge to offer lower fares and are an important part of its inherent strategic existence. Ryanair declared that, in the case of an increase in its fares, the probability for potential competitors to enter the market would be much higher. If a monopoly carrier were to charge higher prices, substantially above the competitive level, the question remains as to whether a more efficient potential operator would then be tempted to enter Ryanair routes on which Ryanair operates. This question is relevant and shows that the dynamic of contestable markets should not be underestimated. However, the EU General Court has so far avoided that question, not formally saying that Ryanair would charge much higher fares in a monopoly situation, even though there was no clear evidence it would do so in a prospective approach. The General Court reminded that the control of concentrations is based on the classic control of market structures and stated that “the price criterion is not the only one which may be taken into consideration, since the implementation of the concentration may also affect available capacity, choice, quality of service and innovation”64. The analysis of the fast-moving airline sector should not be static, being worth noting that the LCCs’ revolution emerged after the liberalisation. However, it should be asked if this would have been possible not only for regulatory reasons but also because of fuel-efficiency technologies and direct distribution channels that emerged with the World Wide Web. The emergence of fuel-efficiency engines and direct booking channels probably played a significant role in the increased “contestability” of the LCCs’ airline markets as it lowered the cost and stimulated the markets through lower fares. The rising rivalry by LCCs entering the markets of historical FSCs tended to increase in some European markets65. Nonetheless, data from the airline industry suggests 64 Ibid, para 250: “the applicant’s assertion that it does not envisage charging prices higher than required to remain competitive following the implementation of the concentration – as it claims is apparent from the fact that on the routes on which it is the only carrier at present the prices which it charges are as low as, or lower than, those which it charges on routes on which it has competitors – cannot cast doubt on the Commission’s analysis of the barriers to entry. As the Commission maintains, the control of concentrations differs from the control of the abuse of a dominant position in that it focuses on the control of market structures and not on the control of companies’ conduct. The control of concentrations aims, on the basis of a prospective analysis of the market structures, to prevent the implementation of a transaction which would significantly impede effective competition in the common market or a substantial part thereof, in particular by the creation or strengthening of a dominant position. As regards prices, the relevant criterion is thus whether the entry onto the market of a new competitor is capable of preventing prices increasing above their level prior to the concentration. The price criterion is not the only one which may be taken into consideration, since the implementation of the concentration may also affect available capacity, choice, quality of service and innovation”. 65 Emmanuel Combe, Rapport “Les Vertus Cachés du Low Cost Arien”, Fondapol, 2010. The study of entry at Lyon airport showed that at least 11 routes, previously operated by the historical carrier, were now operated in duopoly.
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