EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Given the financial demands of air transport operation, some air carriers were unable to cope with the sudden and very significant loss of revenue, for which they were not and could not be prepared in practice. Thus, individual countries have faced and, in many cases, continue to face the unpleasant situation of whether to support these air carriers, or to leave them at the mercy of market mechanisms, even if that would mean their entering into insolvency and possibly bankruptcy. In this context, it is possible to mention the recent recapitalisation aid granted to the German airline Lufthansa (European Commission [online], 2020) or the Czech airlines České aerolinie who got into insolvency because of the COVID-19 pandemic after not obtaining any state guarantees or other state benefits and is currently undergoing reorganisation (ČTK [online], 2021). While it can be expected that the current COVID-19 crisis may have a negative impact on the financial side of air carriers in the future, where in some cases it may lead to a reduction in the offer of transport connections or, in extreme cases, their extinction. This may apply mainly to those routes which are economically unattractive and the operation of which makes no sense from the point of view of a regular investor. However, as individual countries are generally obliged to provide a certain level of connectivity and serviceability and some routes cannot be operated efficiently by modes of transport other than air transport, operation of such economically unattractive air routes may be considered necessary for the Member State and its population just to ensure a certain level of transport connectivity and serviceability. In such a case, it may be necessary for the Member State concerned to intervene in the market and to entrust an air carrier to operate the route as a service of general economic interest (SGEI), under the so-called “public service obligation” (PSO), eventually even in connection with provision of financial compensation. Therefore, this paper deals with the operation of air transport as a SGEI (i.e., under PSO) and with individual conditions under which such operation of air transport can be realized, in particular in the context of the current COVID-19 pandemic. In this regard, this paper also tries to reveal the shortcomings of the current legal regulation in connection with the COVID-19 pandemic and to propose changes thereto. In connection therewith, mainly general theoretical methods are used, such as analysis and synthesis, deduction and induction, and comparison with legal regulation in rail transport. 2. Main characteristics of SGEIs The free movement of goods, persons, services, and capital is ensured within the EU internal market under Article 26(2) of the Treaty on Functioning of the EU (TFEU). For the purposes of their enforcement and to avoid restriction of business conduct (Tomášek, 2013), EU law ensures free competition prohibiting any state intervention in the market, including granting of state aid under Article 107(1)

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