JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

13 May 2015 (*)

(Competition — Concentrations — Air transport — Decision declaring a concentration to be compatible with the common market — Assessment of the effects of the transaction on competition — Commitments)

In Case T‑162/10,

Niki Luftfahrt GmbH, established in Vienna (Austria), represented by H. Asenbauer and A. Habeler, lawyers,

applicant,

v

European Commission, represented initially by S. Noë, R. Sauer and N. von Lingen, and subsequently by S. Noë, R. Sauer and H. Leupold, acting as Agents,

defendant,

supported by

Republic of Austria, represented initially by C. Pesendorfer, E. Riedl and A. Posch, and subsequently by C. Pesendorfer and M. Klamert, acting as Agents,

by

Deutsche Lufthansa AG, established in Cologne (Germany), represented initially by S. Völcker and A. Israel, and subsequently by S. Völcker and J. Orologas, lawyers,

and by

Österreichische Industrieholding AG, established in Vienna, represented by H. Kristoferitsch, P. Lewisch and B. Kofler-Senoner, lawyers,

interveners,

APPLICATION for annulment of Commission Decision C(2009) 6690 final of 28 August 2009 declaring a concentration to be compatible with the common market and the EEA Agreement (Case No COMP/M.5440 — Lufthansa/Austrian Airlines),

THE GENERAL COURT (Eighth Chamber),

composed of D. Gratsias, President, M. Kancheva (Rapporteur) and C. Wetter, Judges,

Registrar: K. Andová, Administrator,

having regard to the written procedure and further to the hearing on 26 June 2014,

gives the following

Judgment

 Facts giving rise to the dispute

1.     The undertakings concerned

1        Deutsche Lufthansa AG (‘Lufthansa’) is Germany’s largest airline. It provides scheduled passenger and cargo transport and related services. In 2008 Lufthansa had 272 aircraft, with which it carried 45 000 000 passengers to more than 200 destinations in 85 countries. Its hubs are Frankfurt am Main International Airport (Germany) and Munich airport (Germany) and it also has a base at Düsseldorf airport (Germany). Lufthansa also controls Swiss International Air Lines Ltd (‘Swiss’), based at Zurich airport (Swiss), Air Dolomiti, Eurowings and Eurowings’ low-cost subsidiary, Germanwings. In addition, it has acquired British Midlands (‘BMI’) and Brussels Airlines (‘SN Brussels’). Lufthansa also holds 19% of the shares of Jet Blue, a low-cost airline operating in the United States. Lufthansa and Swiss are members of Star Alliance.

2        Austrian Airlines (‘Austrian’) is Austria’s largest airline, having its main hub at the international airport at Vienna (Austria). It provides scheduled passenger and cargo transport and related services. It serves 121 destinations in 63 countries, including through code-sharing agreements with other airlines. Its subsidiaries include Lauda Air and Tyrolean Airways. It also holds 22.5% of the shares in Ukraine International Airlines. Austrian is a member of Star Alliance.

3        Niki Luftfahrt GmbH is a company governed by Austrian law; it is established in Vienna and operates an airline under the name ‘FlyNiki’ or ‘Niki’. It operates out of Vienna, Linz (Austria), Salzburg (Austria), Graz (Austria) and Innsbruck (Austria), providing, in particular, flights to destinations throughout Europe and North Africa. At the time of bringing the action the applicant was owned as to 76% by Privatstiftung Lauda (Lauda private foundation) and as to 24% by the second largest German airline, Air Berlin.

2.     Administrative procedure

4        In 2008, Austrian reported losses of EUR 430 000 000 and in mid-2009 the net result for the period January to June 2009 corresponded to a loss of EUR 166 600 000. In July 2008, Austrian’s supervisory board concluded that it would be difficult to continue to operate Austrian as a stand-alone company. Consequently, Austrian’s supervisory board asked the Republic of Austria, Austrian’s main shareholder, to privatise the company. As a consequence, the Austrian Government issued a privatisation mandate pursuant to which the public holding Österreichische Industrieholding Aktiengesellschaft (‘ÖIAG’) was authorised to dispose of its entire shareholding in Austrian.

5        On 5 December 2008, in the context of the procedure in the privatisation of Austrian, Lufthansa agree to acquire a 41.56% share in Austrian indirectly from ÖIAG. 

6        In addition, on 27 February 2009, Lufthansa launched a public offer for all the remaining free-floating shares in Austrian, for which it received more than the required quantity of declarations of acceptance. Together with the shares acquired from ÖIAG, Lufthansa was thus able to acquire 85% of the shares in Austrian.

7        The concentration resulting from Lufthansa’s participation in Austrian was notified to the Commission of the European Communities on 8 May 2009.

8        In addition to assessing the compatibility of the concentration in question with the common market, the Commission at the same time assessed the terms of the proposal for the acquisition by Lufthansa of the Republic of Austria’s shares in Austrian, including the payment of EUR 500 000 000 by the Republic of Austria in order to increase Austrian’s capital, in the light of Articles 87 EC and 88 EC.

9        By decision of 1 July 2009, the Commission found that the concentration raised serious doubts as to its compatibility with the common market. The Commission therefore decided to initiate the in-depth examination procedure, in accordance with Article 6(1)(c) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1; ‘the Merger Regulation’).

10      On 10 July 2009, Lufthansa submitted a number of proposed commitments, in accordance with Article 8(2) of the Merger Regulation. On 17 and 27 July 2009, Lufthansa submitted revised versions of those commitments. After receiving the revised version of those commitments, the Commission launched a market investigation in order to obtain the viewpoints of competitors, customers and other market players on those commitments. The results of that market investigation were communicated to Lufthansa, which then submitted a final version of its commitments on 31 July 2009 (‘the commitments’).

11      As the Commission considered that the commitments submitted by Lufthansa were sufficient to remove the serious doubts as to the compatibility of the concentration with the common market, it did not send Lufthansa a statement of objections and adopted Decision C(2009) 6690 final of 28 August 2009 (Case No COMP/M.5440 — Lufthansa/Austrian Airlines) (‘the contested decision’). By that decision, a summary of which was published in the Official Journal of the European Union (OJ 2010 C 16, p. 11), the Commission declared that the concentration whereby Lufthansa acquired control of Austrian within the meaning of Article 3(1)(b) of the Merger Regulation was compatible with the common market and the EEA Agreement.

12      At the same time as the merger control procedure, the Commission adopted two decisions on State aid. In the first place, by the Decision of 19 January 2009 on State aid NN 72/08, Austrian Airlines — Rescue aid, the Commission approved rescue aid in the form of a 100% guarantee provided by the Republic of Austria on a loan of EUR 200 000 000 to Austrian to be used in priority to repay the latter’s debts. In the second place, on 28 August 2009 the Commission adopted Decision 2010/137/EC (ex NN 663/08) — Austria Austrian Airlines — Restructuring Plan (OJ 2010 L 59, p. 1) (‘the Restructuring Plan decision’), declaring that, subject to certain conductions, the restructuring aid granted by the Republic of Austria in favour of Austrian in the context of the purchase of Austrian by the Lufthansa group was compatible with the common market. The latter decision forms the subject-matter of an action for annulment registered on the list of cases before the Court as Case T‑511/09.

3.     Content of the contested decision

 Relevant markets

13      As regards the definition of the relevant markets, the Commission identified a number of services provided by Lufthansa and by Austrian, namely passenger air transport services, air cargo transport services, the sale of airline seats to tour operators, maintenance, repair and overhaul services, in-flight catering and ground handling services. However, in the context of the present dispute, only the passenger air transport service and the sale of airline seats to tour operators are relevant.

14      As regards, in the first place, the passenger air transport service, the Commission, in accordance with its practice, essentially examined the question of supply-side substitutability. It defined the relevant markets by reference of the ‘point of origin — point of destination’ approach (‘the O&D approach’), where each route between a point of origin and a point of destination is regarded as a separate market. In order to determine whether a given route between a point of origin and a point of destination was a market to be taken into consideration, the Commission examined the various possibilities available to consumers to travel between those two points.

15      With more particular regard to network carriers, however, the Commission took into consideration certain supply-side elements, such as competition between airlines based on the ‘hub and spoke’ network structure of traditional carriers. It thus stated that although from a supply-side perspective a network carrier could in theory fly from any point of origin to any point of destination, in practice network carriers built their network and decided to fly almost exclusively on routes connecting to their hubs. According to the Commission, similar considerations applied to airlines that focus on point-to-point services. It also observed that, from a demand-side perspective, it had previously considered that while networks had some importance for corporate customers whose demand was driven both by network effects and by O&D considerations, individual customers essentially sought the cheapest and most convenient connection between two cities.

16      In the contested decision, the Commission stated that the market investigation had generally confirmed the O&D approach. However, some responses, particularly those of the traditional network carriers, had indicated that the O&D approach failed to take into account the hub and spoke function of major airports and the ensuing network effects. Thus, several carriers had pointed out that both the point of origin and the point of destination should include all airports that were substitutable from the perspective of passengers.

17      In that context, the Commission examined flight substitutability from the perspective of passengers according to the following factors: the existence of at least two airports at the point of origin or of destination; passenger time-sensitivity; and the direct or indirect nature of flights. First of all, as regards the existence of at least two airports at the point of origin or of destination, the Commission considered that the criterion according to which airports would be considered to be substitutable where they were in the same catchment area corresponding to a distance of 100 km or one hour of travel time between the city centre and the airports, as used in Decision C(2007) 3104 of 27 June 2007 Ryanair/Aer Lingus (Case COMP/M.4439 — Ryanair/Aer Lingus) (OJ 2008 C 47, p. 9), was only a first ‘proxy’ that was not necessarily valid for other cases, such as routes served by two network carriers. Consequently, the Commission stated that the characteristics of the particular case should be taken into account in order to correctly capture the competitive constraints that flights from/to two different airports exerted on each other. The Commission thus examined the substitutability of flights from different airports, in particular in relation to the following pairs of airports: Bratislava Airport (Slovakia) and Vienna International Airport Schwechat; Frankfurt-Hahn Airport and Frankfurt International Airport; Cologne-Bonn Airport and Düsseldorf International Airport; Brussels South Charleroi Airport and Brussels National Airport Zaventem.

18      Next, as regards the substitutability of flights by reference to the time sensitivity of passengers, the Commission observed that in previous decisions it had had considered that unrestricted tickets primarily purchased by time-sensitive passengers might constitute a different market from the market for restricted tickets primarily purchased by non-time-sensitive passengers. On the one hand, time-sensitive passengers tend to travel for business purposes, to buy their tickets close to departure, to require significant flexibility for their tickets, such as cost-free cancellation and change of departure time, to pay higher prices for that flexibility and to require a higher number of frequencies on a given O&D pair. On the other hand, non-time-sensitive passengers essentially travel for leisure purposes or to visit friends and family, book well in advance and do not require flexibility with their bookings. Time-sensitive passengers therefore have different preferences from non-time-sensitive passengers, which is reflected in the different types of tickets with which the airlines target those two different groups of passengers.

19      According to the Commission, the analysis of this case confirmed that there were essentially two categories of passengers with different needs and different price sensitivities, although some participants in the market investigation indicated that that distinction between time sensitive and non-time-sensitive passenger was becoming less evident, as even time-sensitive passengers were becoming increasingly price-focused and tended to prefer a restricted ticket to an unrestricted ticket if it was less expensive. In the light of that preference for restricted tickets, most carriers, including the low-cost carriers, offered rebooking services (modifying either the date or the passenger’s name) for a fee. However, the distinction between time-sensitive passengers and non-time-sensitive passengers, and hence between unrestricted and restricted tickets, remained important. Time-sensitive passengers continue to require a higher number of frequencies and specific departure and arrival times at the point of origin and destination. Last, given the need for flexibility and the shortest possible travel time, time-sensitive passengers seem to be less inclined to use secondary airports than non-time-sensitive passengers.

20      In particular, most participants in the market investigation consider that time-sensitive passengers need to maximise their time at their destination and minimise their travel time. Consequently, for most of the participants in the market investigation, that segment of passengers requires early morning and late afternoon flights (with an ideal morning departure time at around 7 a.m., with a maximum time window between 6.30 and 8.30 a.m., and an afternoon departure time at around 6 or 7 p.m., with a maximum time window between 5 and 8 p.m.). Time-sensitive passengers also require a sufficient number of daily flight frequencies. A minimum of two flights per day are required to allow for a same-day return, although a majority of participants in the market investigation indicated that time-sensitive passengers required more than two flights per day, depending on the destination. The type of carrier preferred by time-sensitive passengers is also relevant: most participants in the market investigation consider that time-sensitive passengers prefer full service network carriers to low-cost carriers. Those views are shared by all groups of participants in the market investigation, namely corporate customers, travel agents and competing airlines.

21      In addition, the Commission observes that the possibility of making same-day return trips to short-haul destinations was considered important by all of the responding corporate customers, mainly because of the time and money saved, and the majority are even prepared to pay a slight premium in order to benefit from same-day return trips. That is also confirmed by the replies of travel agents.

22      As regards airport location, most responding travel agents and competitors indicated that primary airports located close to business centres and short distances were more important to time-sensitive passengers than for non-time-sensitive passengers. Corporate customers stated that they have a clear preference for minimising travel time (and costs for business trips) of their employees, regardless of whether they regard their employees as time sensitive or non-time sensitive.

23      Last, as regards the level of substitutability of indirect flights and direct flights, the Commission considered that it depended on the duration of the flight. As a general rule, the longer the flight, the higher the likelihood that indirect flights will exert a competitive constraint on direct flights. With respect to short-haul routes, the Commission observes that it considered in previous decisions that indirect flights did not exert competitive pressure on direct flights, save in exceptional circumstances, for example where the direct flight does not allow a one-day return trip, which is of particular importance for business travellers. The market investigation largely confirmed that, for short-haul flights, indirect flights did not generally constitute a competitive alternative to direct flights, since customers actually prefer direct flights. The Commission emphasises that in previous decisions it analysed mid-haul flights, that is to say, flights of more than three hours where direct flights do not normally allow a one-day return trip, so that indirect flights are able to compete with direct flights (Commission Decision of 4 July 2005 in Case No COMP/M.3770 — Lufthansa/Swiss (OJ 2005 C 204, p. 3), paragraph 17, and Commission Decision in Case COMP/M.4439 — Ryanair/Aer Lingus, paragraph 288 et seq.).

24      Owing to the longer flight duration of those mid-haul routes, indirect flights seem to be more credible alternatives and some participants in the market investigation indicated that indirect flights, in certain circumstances, constituted a competitive alternative. That analysis was in line with the Commission’s previous practice (see Commission Decision of 22 June 2009 in Case No COMP/M.5335 — Lufthansa/SN Airholding (OJ 2009 C 295, p. 11), paragraph 45).

25      As regards long-haul flights (flights over six hours covering a distance of over 5 000 km), the Commission observes that it considered in previous decisions that indirect flights constituted a competitive alternative to non-stop services on certain conditions, in particular where (a) they are marketed as connecting flights on the O&D pair in the computer reservations, (b) they operate on a daily basis and (c) they result in only a limited increase in travelling time (a maximum of 150 minutes) (see, for example, Commission Decision of 12 January 2001 in Case No COMP/M.2041 — United/US Airways and Commission Decision of 5 March 2002 in Case No COMP/M.2672 — SAS/Spanair (OJ 2002 C 93, p. 7)). The market investigation largely confirmed that indirect flights constitute a competitive alternative in the case of flights lasting more than six hours, and a number of participants in the market investigation regarded them as substitutable.

26      As regards, in the second place, the wholesale supply of airline seats to tour operators, the Commission considered that the market investigation did not contradict its findings in previous decisions that there was such a market, separate from the passenger air transport service market (see, for example, Commission Decision 17 December 2008 in Case No COMP/M.5141 — KLM/Martinair (OJ 2009 C 51, p. 4), paragraph 121, or Commission Decision in Case No COMP/M.4439 — RyanAir/AerLingus, paragraph 299). The Commission considered, however, that it was not fully clear from the market investigation whether that market was national in scope or whether it comprised Germany and Austria.

 Assessment of the effects of the transaction on competition

 Conceptual framework for the assessment of the concentration

27      As a preliminary point, the Commission emphasised in the contested decision that before being notified of the proposed transaction it had received notification of a transaction on 26 November 2008 according to which Lufthansa intended to acquire sole control of SN Airholding SA/NV, the holding company of SN Brussels. The Commission authorised the acquisition of SN Brussels by Lufthansa subject to certain conditions on 22 June 2009 (Case No COMP/M.5335 — Lufthansa/SN Airholding). Furthermore, on 3 April 2009 the Commission also received notification of a transaction whereby Lufthansa intended to acquire sole control of BMI. The Commission approved that transaction without conditions, by decision of 14 May 2009 (Case No COMP/M.5403 — Lufthansa/BMI (OJ 2009 C 158, p. 1)) (‘the Lufthansa/BMI Decision’). Lufthansa’s transactions with SN Brussels and BMI were concluded on 24 June 2009 and 1 July 2009 respectively and were subsequently implemented. When analysing the concentration between Lufthansa and Austrian, the Commission therefore treated SN Brussels and BMI as subsidiaries of Lufthansa.

28      The Commission then stated that the transaction raised two conceptual issues, the first concerning the treatment of Lufthansa’s and Austrian’s partners within Star Alliance for the purpose of market definition and the competitive analysis of the transaction and the second relating to the relevant counterfactual for the assessment of the effects of the transaction with respect to the routes on which Lufthansa (including Swiss, Germanwings, SN Brussels and BMI) and Austrian cooperate with each other.

29      In the first place, the Commission considered, in that regard, that the partners of Lufthansa and Austrian within Star Alliance should not be taken into consideration in the definition of the affected markets, since the transaction would not have the effect of automatically extending the cooperation agreements between Lufthansa and its Star Alliance partners to Austrian or have the effect of extending the cooperation agreements between Austrian and its Star Alliance partners to Lufthansa. As regards the competitive analysis of affected markets, the Commission considered that the relationship between the airlines and the subsequent impact of the transaction on their incentive to compete after the merger ought to be evaluated on a route-by-route basis. Thus, according to the Commission, if it is found that a party to the concentration and a third party have less incentive to compete on account of the transaction, that factor must be taken into account for the purposes of the assessment.

30      In the second place, the Commission determined the relevant counterfactuals in order to evaluate the effects of the transaction on routes on which Lufthansa and Austrian cooperate. The Commission recalled the terms of paragraph 9 of the Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings (OJ 2004 C 31, p. 5; ‘the 2004 Guidelines’):

‘In assessing the competitive effects of a merger, the Commission compares the competitive conditions that would result from the notified merger with the conditions that would have prevailed without the merger. In most cases the competitive conditions existing at the time of the merger constitute the relevant comparison for evaluating the effects of a merger. However, in some circumstances the Commission may take into account future changes to the market that can reasonably be predicted. …’

31      In that context, the Commission considered that the relevant counterfactual scenarios for the assessment of the effects of the concentration on competition were (i) the pre-merger state of cooperation between the parties; and (ii) the most likely foreseeable future development if the acquisition of Austrian by Lufthansa did not take place.

32      As regards the pre-merger cooperation between Lufthansa and Austrian, the Commission stated that it existed in a number of forms, namely (i) a cost and revenue sharing joint venture on all routes between Austria and Germany; (ii) a worldwide bilateral cooperation agreement; (iii) a code-share agreement on routes between Austria and Switzerland; and (iv) a code-share between British Midlands, a Lufthansa subsidiary, and Austrian.

33      As regards the most likely development if the acquisition of Austrian by Lufthansa did not take place, the Commission took, in the light of the Austrian Government’s decision to find a private investor for Austrian, the scenario of an acquisition by another airline, more specifically by Air France-KLM. In that scenario, Austrian would terminate its cooperation with Lufthansa and leave Star Alliance to join Sky Team, to which Air France-KLM belongs.

 Analysis of competition

34      In the first place, as regards the scheduled passenger air transport service, the Commission considered that the concentration gave rise to a number of horizontal overlaps that could be grouped in the following categories:

–        23 short-haul routes between Austria and Germany, which are serviced under the cost and profit-sharing joint venture;

–        three short-haul routes between Austria and Switzerland;

–        one short-haul route between Austria and Belgium;

–        on short-haul route between Austria and the United Kingdom;

–        ‘direct-indirect overlaps’, that is to say, routes where one party offers a direct connection, while the other offers an indirect connection; and

–        ‘indirect-indirect overlaps’, that is to say, routes where both parties offer only indirect services.

35      Following its analysis of competition on the different horizontal overlaps, the Commission concluded that the transaction raised serious doubts as to its compatibility with the common market on the following routes: Vienna-Stuttgart (Germany), Vienna-Cologne-Bonn (Germany), Vienna-Munich, Vienna-Frankfurt am Main and Vienna-Brussels (‘the identified city pairs’).

36      In the second place, as regards the sale of airline seats to tour operators, the Commission considered that, owing to Lufthansa’s and Austrian’s combined market shares on the German market, the Austrian market and the combined Austria-Germany market for long-haul flights which are, in all three cases, between 5% and 10%, and also the strong presence of FlyNIki on the Austrian market (between 40% and 50% of market shares for short-haul and mid-haul flights), the transaction would not significantly impede effective competition on the market for the sale of airline seats to tour operators.

37      Furthermore, the Commission considered it appropriate also to assess the impact of the rescue aid and restructuring aid granted to Austrian on the markets, in particular, of passenger air transport and the sale of airline seats to tour operators, on the ground that those funds could reinforce Austrian’s commercial position.

38      In that regard, the Commission observed, however, that Austrian was in financial difficulties. The Commission thus stated that on 19 December 2008 Austria had notified the Commission of its decision to grant rescue aid to the Austrian group and that on 22 December 2008 it had learnt that a first tranche of EUR 67 000 000 of that rescue aid had been granted to Austria to allow it to continue operations, before the Commission had been able to take a position on its compatibility with the common market.

39      The Commission observed that Austrian’s perilous financial situation was further illustrated by the fact that any stand-alone Austrian operation would require additional funding going significantly beyond the amount of the rescue aid and the restructuring aid. In addition, the Commission stated that the rescue aid of EUR 200 000 000 had to a very large extent already been used by Austrian to repay aircraft financing and that the extent of its financial needs was in line with the findings in Decision 2010/137 that the cost of restructuring was significantly in excess of EUR 500 000 000.

40      The Commission concluded that it was unlikely that Austrian had used or would use the rescue aid and the restructuring aid in a way that would call into question its analysis of the effects of the concentration of the affected markets and, in particular, to prevent the expansion of its competitors. The Commission observed that both the rescue aid and the restructuring aid were aimed at making the acquisition of Austrian by Lufthansa economically sustainable and, in particular, at ensuring the liquidity of Austrian, reducing its liabilities and restoring its profitability in the long term. The Commission also stated that it would monitor the use of funds by Austrian in the future.

41      The Commission indicated that that conclusion was also confirmed by the strong financial position of Lufthansa, which had achieved operating results of above EUR 1 000 000 000 in 2007 and 2008 and had a total liquidity of EUR 5 200 000 000, including a strategic minimum liquidity of EUR 2 000 000 000 on 31 March 2009. In fact, according to the Commission, the impact of the rescue aid and the restructuring aid would be limited by comparison with the financial strength of the merged entity.

42      Furthermore, as regards the direct-direct routes which are served by only one of the parties, the Commission stated that the market investigation had not revealed that the grant of additional funds to Austria would change the findings in relation to those routes in particular, that is to say that the transaction would lead to the elimination of potential competition. On the contrary, the main reasons why no competition concerns arose in relation to those routes, namely low demand on most of those routes, entry strategies of Lufthansa and Austrian as evidenced by internal documents, the absence of parallel operations pre-cooperation on most of those routes, applied independently of the State aid in question. In addition, with more particular regard to Austrian’s entry strategy, the market investigation did not reveal any indications that Austrian would change its entry strategy in view of the additional funds at issue, which was also illustrated by the fact that Austrian had already exhausted almost all the rescue aid without changing its entry strategy. It was therefore unlikely that Austrian would use those additional funds to begin to operate on those routes.

 Commitments

43      In order to remove the serious doubts raised by the concentration as regards its compatibility with the common market, Lufthansa and Austrian proposed commitments in order to resolve the competition concerns in relation to the identified city pairs. The commitments, which are aimed at reducing the barriers to entry and at facilitating the entry of one or more new entrants or the expansion of competitors already present on those routes, are summarised below.

 Commitments concerning slots

–       Slot release on city pairs raising competition concerns

44      In the context of the commitments, the parties undertook to make slots available, according to a specific procedure, at the airports of Vienna, Stuttgart, Cologne/Bonn, Munich, Frankfurt-am-Main and Brussels on the five routes in respect of which the Commission identified competition concerns.

45      The slots made available would enable a new entrant to operate the following numbers of frequencies on the identified city pairs:

–        Vienna-Stuttgart: up to three frequencies per day;

–        Vienna-Cologne/Bonn: up to three frequencies per day, but not more than 18 frequencies per week;

–        Vienna-Frankfurt-am-Main, up to five frequencies per day;

–        Vienna-Munich: up to four frequencies per day;

–        Vienna-Brussels: up to four frequencies per day, but not more than 24 frequencies per week.

46      The number of slots referred to above would be reduced by those already transferred to a new entrant under the commitments, unless those slots should cease to be used by the new entrant and therefore revert to the parties.

47      As regards all the identified city pairs, with the exception of Vienna-Frankfurt-am-Main and Vienna-Munich, to which special provisions applied, frequencies already used by an airline independent of or unconnected to the parties on an identified city pair were to be deducted from the number of slots which the parties were to make available to that airline under the commitments.

48      As regards the Vienna-Frankfurt-am-Main route, the two daily frequencies operated by the applicant (three frequencies, to the extent that the applicant would obtain a third slot from Lufthansa as from the International Air Transport Association (IATA) winter season 2009/2010) would be deducted from the number of slots to be made available under the commitments. If the applicant were to cease to operate one or more of those frequencies before acquiring grandfathering rights, those frequencies would be made available to new entrants under the commitments.

49      The applicant would be entitled to exchange the slots it received from Lufthansa at Frankfurt-am-Main airport in accordance with the existing slot lease agreement between Lufthansa and the applicant against slots which Lufthansa would make available under the commitments. However, in order to take Lufthansa’s wave structure at Frankfurt-am-Main airport into account, Lufthansa would not be required to transfer to the applicant more than one slot at Frankfurt-am-Main airport during each of the following periods:

Arrival:	Departure
5 h 35 — 8 h 00	6 h 30 — 8 h 15
8 h 05 — 10 h 20	8 h 20 — 11 h 35
10 h 25 — 14 h 00	11 h 40 — 15 h 05
14 h 05 — 15 h 30	15 h 10 — 16 h 15
15 h 35 — 17 h 50	16 h 20 — 19 h 45
17 h 55 — 21 h 50	19 h 50 — 22 h 25

50      Furthermore, and independently of whether or not the applicant should choose to obtain new slots from the parties to the concentration in exchange for its current slots at Frankfurt-am-Main airport, Lufthansa undertook to amend its existing slot lease agreement with the applicant to reflect the provisions of the commitments, in particular as regards the possibility for the applicant to acquire grandfathering rights in respect of those slots.

51      Furthermore, if no operator other than a Star Alliance operator should request a remedy slot for the IATA summer season 2010 (or the first season for which the procedures for implementation of the commitments would be in place, whichever would be the later), one of the three frequencies operated by Adria Airways on the Vienna-Frankfurt-am-Main route would be deducted from the number of slots to be made available under the commitments. That deduction would initially apply for a period of four consecutive IATA seasons and for every subsequent period of two years until a non-Star Alliance operator should request a remedy slot.

52      In addition, Lufthansa undertook to amend its existing agreements with Adria Airways with respect to one slot, to reflect the provisions of the commitments, provided however that Adria Airways would not obtain grandfathering rights.

53      As regards the Vienna-Munich route, where the applicant operates three daily frequencies for which it had received slots via the normal slot allocation procedure, the commitments provide that Niki would be entitled to exchange its current slots on that route against slots which Lufthansa would make available under the commitments. Regardless of whether or not Niki decided to exchange its present slots under the commitments, its frequencies would be deducted from the total number of slots to be made available by the parties on that route. If Niki should cease to operate one or more of its frequencies, they would be made available to new entrants under the commitments.

54      As regards the Vienna-Stuttgart and Vienna-Cologne/Bonn routes, Lufthansa was already required to make slots available to new entrants on the basis of a previous merger decision, namely Commission Decision C2006/018/07 of 22 December 2005 in Case No COMP/M.3940 — Lufthansa/Eurowings (OJ 2006 C 18, p. 22). To the extent that the parties had already made slots available to a new entrant pursuant to the commitments in that case, those slots would be counted against the number of slots to be made available pursuant to the commitments in the present case. New entrants would be able to choose slots for those two routes pursuant to the commitments which they wished to be applied, namely those given in the previous case or those given in this case.

–       Conditions pertaining to the slot transfer

55      The slot transfer procedure envisaged by the commitments would run in parallel with the normal slot allocation procedure. An airline wishing to obtain slots on one of the identified city pairs would request slots through the normal slot allocation procedure and apply for a slot transfer under the commitments at the same time. If the airline’s slot request to the slot coordinator was not met as a result of the IATA scheduling conference, the commitments provided that the parties must offer to transfer the requested slots to the requesting airline within one week following the latter’s commitment to operate them. Slots would have to be released free of charge and be within 20 minutes of the time requested by the requesting airline if either of the parties to the concentration had slots available in that timeframe. Otherwise, the parties would have to offer the slots closest in time to the requesting airline’s request.

56      The slot lease agreement between the parties to the concentration and the requesting airline would have to be signed and the transfer effected within three weeks after the slot handback deadline, which is 15 January for the IATA summer season and 15 August for the IATA winter season. The slot lease agreement will have a duration equal to the utilisation period of the relevant identified city pair, but the new entrant will have the right to terminate the agreement at the end of each IATA season without penalty. Finally, the commitments provide that a new entrant who decides to operate the greatest number of routes will be favoured.

–       Grandfathering rights

57      The commitments also made provision for the new entrants to acquire grandfathering rights in relation to slots obtained from the parties to the concentration. The new entrant would obtain grandfathering rights over those slots, that is to say, it would be entitled to use the slots transferred from the parties at both ends of any identified city pair for a different intra-European city pair from the identified city pairs, once it had served the relevant identified city pair during two full consecutive IATA seasons for all identified city pairs except for the Vienna-Frankfurt-am-Main route and during eight consecutive IATA seasons for the Vienna-Frankfurt-am-Main route. By contrast, if the new entrant should cease to operate the slots transferred in the relevant identified city pair before the end of the two IATA seasons referred to above, those slots would be handed back to Lufthansa and would be made available under the commitments for another new entrant.

–       Star Alliance members as new entrants

58      The above commitments were to be fully applicable only to new entrants which were not members of Star Alliance. In principle, Star Alliance members could also obtain slots in the framework of the commitments, but airlines not members of Star Alliance would be given priority if several potential entrants were to apply for slots on the same route under the commitments. Priority would always be given to a non-Star-Alliance airline, that is to say, even if a Star Alliance member were to apply for a larger number of routes than an airline which was not a member of Star Alliance.

59      Furthermore, a new entrant which was a member of Star Alliance would not be able to obtain grandfathering rights in relation to slots obtained from the parties. A new entrant which is a Star Alliance member will not be able to enter into a code-share agreement or a revenue-sharing/profit-sharing joint venture with the parties to the concentration or with other Star Alliance partners on the identified city pairs. When a Star Alliance members ceases to use one of the slots released pursuant to the commitments, the parties to the concentration must offer those slots to new entrants again.

60      If a Star Alliance member obtained slots pursuant to the commitments, the Commission might impose specific conditions, notably to guarantee the independence of Star Alliance airline from the parties to the concentration.

 Other commitments and provisions

–       Special prorate and code-share agreements

61      The commitments offered a new entrant the possibility to enter into a special prorate and code-share agreement allowing it to place its codes on flights with a true origin and destination in either Austria, Germany or Belgium, provided that part of the journey involves an identified city pair. The conditions of that special prorate agreement would have to be such that the new entrant would receive the same treatment as the Lufthansa partners which were Star Alliance members for the same identified city pair.

–       Other provisions

62      The slot release commitments are supplemented by other commitments such as the possibility for a new entrant to conclude interlining and frequent flyer programme access agreements with the parties, and also intermodal agreements with a railway or other surface transport company.

63      The commitments envisaged the appointment of a monitoring trustee who would be responsible for monitoring the parties’ compliance with the commitments and for assisting the Commission during the slot transfer procedure provided for in the commitments.

64      The commitments also contained provisions on fast-track dispute resolution according to which the new entrant could decide to settle any dispute with the parties in relation to the commitments through arbitration. The arbitration decision would be binding on both the new entrant and the parties. The burden of proof in any dispute required the new entrant to provide prima facie evidence of its case and the parties to provide evidence to the contrary.

65      The commitments, in particular the obligation to transfer slots, were for an indefinite period but contained a review clause.

 Analysis of the commitments

66      In the context of the evaluation of the commitments proposed by Lufthansa and Austrian, the Commission states that it took account of the interest expressed by competitors in entering the identified city pairs or expanding their activities on them and that it considered that the package of remedies as a whole was attractive in the light of the current economic context of the air transport industry. The Commission states that it concluded that the commitments proposed were likely to entail the entry of one or more airlines on the identified city pairs in a timely manner and that that entry would suffice to remove the serious doubts identified on those markets.

 Conclusion

67      The Commission therefore considered that the concentration should be declared compatible with the common market pursuant to Article 8(2) of the Merger Regulation and with the EEA Agreement pursuant to Article 57 of that agreement, subject to compliance with the commitments set out in the annex, which is an integral part of the contested decision.

68      The Commission stated that that conclusion held true irrespective of the rescue aid and the restructuring aid, owing to the fact that those funds primarily served the purpose of ensuring the survival of Austrian and to their low amount by comparison with the overall financial needs of Austrian and the overall financial strength of Lufthansa.

 Procedure

69      By application lodged at the Court Registry on 13 April 2010, Niki Luftfahrt, the applicant, brought an action for annulment of the contested decision.

70      By documents lodged at the Court Registry on 9 July 2010 and 20 July 2010 respectively, Lufthansa and ÖIAG applied for leave to intervene in the present case in support of the form of order sought by the Commission. By order of 5 October 2010, the President of the Seventh Chamber of the General Court granted Lufthansa and ÖIAG leave to intervene.

71      By document lodged at the Court Registry on 2 August 2010, the Republic of Austria applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission. By order of 5 October 2010, the President of the Seventh Chamber of the General Court granted the Republic of Austria leave to intervene.

72      By documents lodged at the Court Registry on 20 August 2010 and 1 September 2010 respectively, the Commission requested confidential treatment of certain data which in its view constituted business secrets vis-à-vis the interveners.

73      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Seventh Chamber, to which the present case was accordingly assigned on 27 September 2010.

74      As the interveners raised no objections to the request for confidential treatment, a non-confidential version of the pleadings was sent to them, as originally provided for in the orders of 5 October 2010 referred to above.

75      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the First Chamber, to which the present case was therefore assigned on 24 May 2012.

76      On 18 February 2013, by way of a measure of organisation of procedure on the basis of Article 64(3)(b) and (c) of its Rules of Procedure, the Court asked the Commission to inform it what method it had used in order to ensure that the responses provided by competitors, corporate customers and travel agencies in the context of the market investigation carried out during Phase I of the examination of the concentration were representative.

77      On the same date, by means of a measure of organisation of procedure, on the basis of Article 64(3)(d) of the Rules of Procedure, the Court asked the Commission to produce the commitments by the parties to the concentration on 10 July 2009, the questionnaire sent to the market players on 27 July 2009 and the replies to that questionnaire which the Commission had received before the meeting of 31 July 2009, if necessary anonymising the names of the participants in the market investigation, and also the replies to question 28 in the questionnaire sent to the competitors of the parties to the concentration on 12 May 2009 during phase I of the investigation.

78      On 22 March 2013, the Commission replied to the question put by the Court and complied in part with its request for the production of documents.

79      On 17 July 2013, the Court, by a new measure of organisation of procedure, adopted on the basis of Article 64(3)(d) of the Rules of Procedure, asked the Commission to produce the commitments proposed by the parties to the concentration on 10 July 2009 and all the replies to the questionnaire sent to the market players on 27 July 2009 which it had not yet produced, if necessary anonymising the names of the authors of the replies. The Commission complied with that request on 19 August 2013.

80      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Eighth Chamber, to which the present case was therefore assigned.

 Forms of order sought

81      The applicant claims that the Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

82      The Commission, supported by the Republic of Austria, Lufthansa and ÖIAG, contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

83      In support of the action, the applicant puts forward three pleas in law. The first plea alleges infringement of Article 81(1) and (3) EC and of Article 8 of the Merger Regulation and breach of the 2004 Guidelines. The second plea alleges breach of essential procedural requirements. The third plea alleges misuse of powers.

84      As a preliminary point, it should be borne in mind that, according to Article 2(3) of the Merger Regulation, a concentration which would significantly impede effective competition in the common market or in a substantial part of it, in particular as a result of the creation of a dominant position, is to be declared incompatible with the common market. Conversely, pursuant to Article 2(2) of the Merger Regulation, the Commission is required to declare any concentration falling within the scope of that regulation compatible with the common market provided that the condition laid down in Article 2(3) of that regulation is not satisfied.

85      According to settled case-law, the basic provisions of the Merger Regulation, in particular Article 2 thereof, confer on the Commission a certain discretion, especially with respect to assessments of an economic nature, and that, consequently, review by the Courts of the European Union of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the discretionary margin implicit in the provisions of an economic nature which form part of the rules on concentrations (see judgment of 6 July 2010 in Ryanair v Commission, T‑342/07, ECR, EU:T:2010:280, paragraph 29 and the case-law cited).

86      Whilst the Courts of the European Union recognise that the Commission has a margin of discretion with regard to economic matters, that does not mean that they must refrain from reviewing the Commission’s interpretation of information of an economic nature. They must establish, in particular, not only whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (judgment in Ryanair v Commission, paragraph 85 above, EU:T:2010:280, paragraph 30).

87      In addition, according to settled case-law, where the institutions have a power of appraisal, respect for the rights guaranteed by the legal order of the European Union in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the Commission to examine carefully and impartially all the relevant aspects of the individual case, the right of the person concerned to make his view known and also his right to have an adequately reasoned decision (judgment in Ryanair v Commission, point 85 above, EU:T:2010:280, point 31).

88      It is in the light of those principles that the applicant’s pleas and arguments must be examined.

89      The Court considers it appropriate to begin by examining the second plea, alleging breach of essential procedural requirements.

1.     Second plea, alleging breach of essential procedural requirements

90      The second plea consists of two parts, alleging, first, failure to state reasons concerning the competitive situation as regards air routes from Central Europe to Eastern Europe outside the EU and, second, failure by the Commission to establish the facts to a sufficient standard in the context of the market investigation.

 First part of the second plea, alleging breach of the obligation to state reasons

91      The applicant maintains, in essence, that the contested decision fails to state reasons as regards the competitive situation on the air routes between Central Europe and Eastern Europe.

92      In that regard, the applicant’s argument that in the contested decision the Commission merely referred to the market investigation so far as the analysis of the effects of the concentration on routes between Central Europe and Eastern Europe is concerned must be rejected. It is apparent from the contested decision that the Commission stated in recitals 267 and 268 that ‘[t]he proposed transaction gives rise to a large number of affected routes concerning direct-indirect overlaps between [Lufthansa] and [Austrian] both within Europe and from European airports to extra-European destinations’ which were analysed ‘with respect to the market position of the parties and the market share increment brought about by the transaction’. The Commission also stated that ‘the presence and position of competitors and the number of passengers on each route were assessed’ and that, ‘[w]here necessary, the number and duration of frequencies offered by competitors and their suitability for time-sensitive passengers, in particular, were assessed’. The Commission then stated that ‘[o]n the basis of these criteria, no competition concerns were identified’, then that, ‘[i]n addition, the market investigation did not reveal any competition concerns with respect to the identified direct/indirect and indirect/indirect overlaps with the exception of [Lufthansa]’s and [Austrian]’s market position in Central and Eastern Europe’.

93      It should also be noted that the Commission stated in recital 269 to the contested decision that ‘[s]ome [participants in] the market investigation in phase I voiced concerns with respect to the strong market position of [Lufthansa] and [Austrian] in [Central and Eastern Europe], concerning mainly the post-transactional control by [Lufthansa] of a very substantial part of a so-called Central European market, particularly as a result of their control of the most important hubs catering [for Central and Eastern Europe] and their well-developed networks concerning this area’. The Commission further observed that ‘[t]he results of the more refined phase II market investigation showed, however, that the vast majority of corporate customers in particular [did] not see any negative impact in relation to a potentially strengthened position of the merged entity for flights serving [Central and Eastern Europe] and indicated existing alternative competitors’.

94      Consequently, it is apparent from the contested decision that the Commission stated that it had initially analysed the effects of the concentration on routes from Europe to extra-European destinations, therefore including Eastern Europe, on which Lufthansa’s and Austrian’s services presented direct-indirect and indirect/indirect overlaps, following which no competitive concerns had been identified on the routes in question, and then dispelled the competition concerns raised by certain participants in the market investigation during phase I of that investigation in the light of the responses of participants in the market investigation in the more refined phase II of that investigation.

95      The applicant’s assertion that the Commission merely referred to the results of the market investigation in order to explain the lack of competition concerns on routes between Central Europe and Eastern Europe is therefore unfounded.

96      The applicant’s argument that the Commission did not state, in the context of the analysis of the competitive situation on routes between Central Europe and Eastern Europe, on which of those routes the air carriers Air France-KLM, British Airways, CSA and Malev would have constituted credible alternatives to Lufthansa and Austrian must also be rejected.

97      It should be observed that recitals 270 and 271 to the contested decision, where the Commission mentions the carriers referred to above, do not relate to the analysis which led the Commission to find, in recital 268 to the contested decision, that there were no competition concerns about routes between Central Europe and Eastern Europe. That recital actually represented a response to the concerns expressed by certain participants in the market investigation during phase I of that investigation, which the Commission set out in recital 269 to the contested decision. The Commission stated in the latter recital that certain participants in the market investigation were concerned by the control that the concentration would give Lufthansa ‘of a very substantial part of a so-called Central European market, particularly as a result of [Lufthansa’s and Austrian’s] control of the most important hubs catering [for Central and Eastern Europe] and their well-developed networks concerning this area’. As those concerns did not relate to particular routes, but to what was alleged to be Lufthansa’s strengthened position on the entire ‘Central European market’, the Commission, correctly, merely confirmed that, in accordance with what the participants in the market investigation had indicated during phase II, significant network airlines served Central and Eastern Europe. It cannot be inferred that in doing so the Commission failed in its duty to state reasons.

98      As regards the applicant’s argument that the failure to state reasons in the contested decision concerning the competitive situation on the routes between Central Europe and Eastern Europe cannot be explained by the short timescales within which a decision must be adopted in the context of phase II of the investigation procedure, which did not expire until 6 November 2009, it is sufficient to observe that, as stated above, the applicant has not shown that the Commission failed in its obligation to state reasons as regards the competitive analysis of the routes between Central Europe and Eastern Europe; that argument is therefore unfounded and must be rejected.

99      Furthermore, in so far as the applicant’s argument must be interpreted as constituting a complaint that the Commission did not set out in detail in the contested decision the competitive analysis of all routes between Central Europe and Eastern Europe on which the services provided by the parties to the concentration presented a direct/indirect or an indirect/indirect overlap, it should be borne in mind that the reasoning required by Article 296 TFEU must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of renew. Thus, the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgments of 2 April 1998 in Commission v Sytraval and Brink’s France, C‑367/95 P, ECR, EU:C:1998:154, paragraph 63; 22 June 2004 in Portugal v Commission, C‑42/01, ECR, EU:C:2004:379, paragraph 66; and 15 April 2008 in Nuova Agricast, C‑390/06, ECR, EU:C:2008:224, paragraph 79).

100    The institution which adopted the measure is not required, however, to define its position on matters which are plainly of secondary importance or to anticipate potential objections (see, to that effect, judgment of 25 October 2005 in Germany and Denmark v Commission, C‑465/02 and C‑466/02, ECR, EU:C:2005:636, paragraph 106). Moreover, the degree of precision of the statement of the reasons for a decision must be weighed against practical realities and the time and technical facilities available for making the decision (see judgments of 1 December 1965 in Schwarze, 16/65, ECR, EU:C:1965:117, pp. 1081, 1096 and 1097, and 14 February 1990 in Delacre and Others v Commission, C‑350/88, ECR, EU:C:1990:71, paragraph 16). Thus, the Commission does not breach its duty to state reasons if, when exercising its power to examine concentrations, it does not include precise reasoning in its decision as to the appraisal of a number of aspects of the concentration which appear to it to be manifestly irrelevant or insignificant or plainly of secondary importance to the appraisal of the concentration (see, to that effect, judgment in Commission v Sytraval and Brink’s France, paragraph 99 above, paragraph 64). Such a requirement would be difficult to reconcile with the need to act quickly and the short timescales which the Commission is bound to observe when exercising its power to examine concentrations and which form part of the particular circumstances of proceedings for control of those concentrations. It follows that where the Commission declares a concentration to be compatible with the common market on the basis of Article 8(2) of the Merger Regulation the requirement to state reasons is satisfied when that decision clearly sets out the reasons for which the Commission considers that the concentration in question, where appropriate following modification by the undertakings concerned, does not significantly impede effective competition in the common market or in a substantial part of it, in particular by creating or strengthening a dominant position.

101    In view of the fact that the Commission had already found the existence of competition concerns on routes having direct overlaps with respect to which the parties had proposed satisfactory commitments and that it had not found the slightest competition concern on routes having direct/indirect and indirect/indirect overlaps and, moreover, of the significant number of the latter routes in the light of the size of the respective networks of Lufthansa and Austrian, and, last, of the obligation to adopt a decision as soon as the serious concerns are removed, in particular as a result of modifications made by the undertakings to the concentration, the Commission was entitled, without being in breach of its obligation to state reasons, merely to describe the competitive situation on those routes in the way in which it described them in recitals 267 to 273 to the contested decision.

102    It is appropriate, therefore, to reject as unfounded the first part of the second plea, alleging breach of the obligation to state reasons with respect to the competitive situation on the routes between Central Europe and Eastern Europe.

 Second part of the second plea, alleging insufficiency of the establishment of the facts in the context of the market investigation

103    The applicant claims that, given the conditions in which the market investigation was carried out, the Commission was not physically capable of taking account of the results of that investigation concerning the market conditions relating, in particular, to routes between Central Europe and Eastern Europe.

104    The applicant maintains, in particular, that on 16 July 2009, in the context of the market investigation, the Commission sent Lufthansa’s and Austrian’s competitors a questionnaire to be completed by no later than 24 July 2009. In that questionnaire, the Commission requested a large amount of information, notably concerning routes to Eastern Europe and the Middle East. On 20 and 24 July 2009, the Commission sent the applicant alone other questionnaires to be completed by no later than 27 and 30 July 2009.

105    Subsequently, Lufthansa sent, on 27 July 2009, revised proposals for commitments which were less extensive than those proposed during phase I of the examination of the concentration concerning the slots that would be made available, in that the revised proposals no longer envisaged the granting of slots on the Vienna-Zurich (Switzerland) route, although the phase I proposals for commitments were deemed insufficient by the Commission, as is clear from the initiation of phase II of the investigation.

106    According to the applicant, on 27 July 2009 the Commission sent competitors a questionnaire relating to those new proposals for commitments, which was to be completed by no later than 30 July 2009. In that context, the applicant was informed by a member of the Commission’s team that the earlier questionnaires would no longer be processed and that only the last proposals for commitments submitted by Lufthansa would be examined.

107    In addition, the applicant emphasises that, as is apparent from a Commission press release, the Member of the Commission responsible for the case in question, Ms Neelie Kroes, gave instructions to her team on 31 July 2009 — only one day after the expiry of the deadline for completion of the last questionnaires — to prepare a decision authorising the concentration between Lufthansa and Austrian.

108    It is therefore clear that the Commission did not properly conduct the investigation of the market conditions, which it had itself initiated, in particular as regards the routes to Eastern Europe.

109    In that regard, it is important to bear in mind that it is for the Commission to assess whether the information available to it is sufficient for the competitive analysis, just as it is for the Commission to assess whether the commitments proposed eliminate with a sufficient degree of certainty the competition concerns revealed.

110    As regards, in the first place, the applicant’s assertion that the Commission did not take account of the responses to the questionnaire of 16 July 2009 on routes to Eastern Europe and the Middle East, it should be observed that it is based solely on a statement made to the applicant by a member of the Commission’s staff responsible for the case. It must be stated that the applicant has adduced no evidence of such a statement and that assertion must therefore be rejected as mere unsubstantiated allegation.

111    As regards, in the second place, the applicant’s argument that the Commission would not have been capable of taking account of the responses to the questionnaires relating to the new commitments proposed by the parties on 27 July 2009 owing to the short time that elapsed between the deadline for responding to those questionnaires and the decision of the Member of the Commission responsible for the case to request its staff to prepare a conditional authorisation decision, it should be observed that the Commission maintains in its pleadings that, owing to the minimal nature of the changes made to the commitments submitted by the parties to the concentration on 10 July 2009, the perusal of the responses to the questionnaires relating to those commitments took very little time.

112    As the procedural file contained neither the commitments of 10 July 2009 of the parties to the concentration, nor the questionnaire of 27 July 2009 concerning the commitments of the same date, nor even the responses to that questionnaire, the Court, by a measure of organisation of procedure of 18 February 2013, requested the Commission to produce those documents in order to ascertain whether it was physically possible for the Commission’s staff to take the responses to the questionnaire of 27 July 2009 into account before the Member of the Commission responsible for the case in question asked them to prepare a conditional authorisation decision.

113    On 22 March 2013, the Commission produced the commitments of 27 July 2009 of the parties to the concentration, and also the responses to the questionnaire of 27 July 2009 concerning those commitments, which had been received no later than the beginning of the morning of 31 July 2009. The Commission stated, in its reply to the request for the production of documents, that it had also taken into consideration in its assessment the responses that arrived late, that is to say the ones that arrived during the afternoon of 31 July 2009, which were not produced, but that that had not led to a different result, so that the failure to include those responses before the contested decision was adopted by the College of Commissioners had no consequences. However, the Commission did not produce the commitments of 10 July 2009.

114    In those circumstances, the Court, by a new measure of organisation of procedure, requested the Commission to produce the commitments proposed by the parties to the concentration on 10 July 2009 and also the responses to the questionnaires sent to the market players on 27 July 2009 which it had not yet produced. The Commission complied with that request on 19 August 2013.

115    A comparison of the commitments given by the parties to the concentration on 10 and 27 July 2009 shows that the differences between them are confined to the extent to which the parties to the concentration will make slots available on the routes between identified city pairs. In particular, it should be observed that the commitments of 27 July 2009 envisage that four slots per day will be made available to new entrants on the Vienna-Munich route, whereas the commitments of 10 July 2009 envisaged that two daily slots would be made available on the Vienna-Geneva route. Likewise, the details of the revision of the existing agreements between Lufthansa and the applicant concerning the slots to be made available on the Vienna-Frankfurt-am-Main route to reflect Lufthansa’s commitments are slightly different (paragraphs 1.1.1 and 1.1.3 of the two successive versions of the commitments). Having regard to all the commitments given by the parties to the concentration, it must be considered that those changes can be described as slight, notwithstanding their particular importance to the applicant.

116    Therefore, in spite of the significant number of responses received by the Commission to the questionnaire sent to market operators on 27 July 2009, the analysis of those responses does not appear to have been an impossible task for the Commission’s staff to have completed before the Member of the Commission responsible for the case in question asked them, on the basis, in particular, of that analysis, to prepare a conditional authorisation decision.

117    It follows that the second part of the second plea and, accordingly, the second plea in its entirety must be rejected as unfounded.

2.     First plea, alleging infringement of Article 81(1) and (3) EC and Article 8 of the Merger Regulation and breach of the 2004 Guidelines

118    The first plea consists of five parts. The first part alleges a manifest error of assessment in the definition of the relevant geographic market for the purpose of assessing the competitive effects of the concentration; the second part alleges a manifest error of assessment in relation to the competitive effects of the concentration on routes between Germany and Austria; the third part alleges a manifest error of assessment in relation to the consequences of the concentration on air routes between Central Europe and Eastern Europe outside the European Union; the fourth part alleges a manifest error of assessment in relation to the ability of Lufthansa’s and Austrian’s competitors to remain on or to enter the relevant market following the concentration; and the fifth part alleges a manifest error of assessment in relation to the ability of the commitments to provide a remedy for the competition concerns created by the concentration.

 First part of the first plea, alleging a manifest error of assessment in the definition of the relevant geographic market

119    The applicant takes issue with the Commission, in essence, for having defined the relevant geographic market according to the O&D approach and for not having taken a more global approach to the relevant geographic market, which would have been more appropriate for the purpose of assessing the effects of the concentration on competition between two network air carriers, such as Lufthansa and Austrian.

 The definition of the market by the Commission according to the O&D approach

120    As a preliminary point, it should be borne in mind that, according to section 6 of Form CO relating to the notification of a concentration pursuant to the Merger Regulation, set out in Annex I to Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing [the Merger Regulation] (OJ 2004 L 133, p. 1), ‘[t]he relevant product and geographic markets determine the scope within which the market power of the new entity resulting from the concentration must be assessed’.

121    In Section 6, under the heading ‘I. Relevant product markets’, the following is stated:

‘A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the products’ characteristics, their prices and their intended use …

Factors relevant to the assessment of the relevant product market include the analysis of why the products or services in these markets are included and why others are excluded by using the above definition, and having regard to, for example, substitutability, conditions of competition, prices, cross-price elasticity of demand or other factors relevant for the definition of the product markets (for example, supply-side substitutability in appropriate cases).’

122    Also in Section 6, under the heading ‘II. Relevant geographic markets’, the following is indicated:

‘The relevant geographic market comprises the area in which the undertakings concerned are involved in the supply and demand of relevant products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring geographic areas because, in particular, conditions of competition are appreciably different in those areas.

Factors relevant to the assessment of the relevant geographic market include inter alia the nature and characteristics of the products or services concerned, the existence of entry barriers, consumer preferences, appreciable differences in the undertakings’ market shares between neighbouring geographic areas, or substantial price differences.’

123    The Commission Notice on the definition of relevant market for the purposes of Community competition law (OJ 1997 C 372, p. 5; ‘the notice on market definition’), to which Form CO in Annex I to Regulation No 802/2004 refers, sets out the basic principles of market definition.

124    Thus, as regards competitive constraints, paragraph 13 of the notice on market definition states that:

‘Firms are subject to three main sources or competitive constraints: demand substitutability, supply substitutability and potential competition. From an economic point of view, for the definition of the relevant market, demand substitution constitutes the most immediate and effective disciplinary force on the suppliers of a given product, in particular in relation to their pricing decisions. …’

125    Furthermore, paragraph 14 of the notice on market definition states:

‘The competitive constraints arising from supply side substitutability other than those described in paragraphs 20 to 23 and from potential competition are in general less immediate and in any case require an analysis of additional factors. As a result such constraints are taken into account at the assessment stage of competition analysis.’

126    The notice on market definition then defines what is to be understood by demand substitution, supply substitution and potential competition.

127    Thus, paragraph 15 of the notice on market definition states:

‘The assessment of demand substitution entails a determination of the range of products which are viewed as substitutes by the consumer. One way of making this determination can be viewed as a speculative experiment, postulating a hypothetical small, lasting change in relative prices and evaluating the likely reactions of customers to that increase. The exercise of market definition focuses on prices for operational and practical purposes, and more precisely on demand substitution arising from small, permanent changes in relative prices. …’

128    According to paragraph 16 of the notice on market definition, that approach means that, ‘starting from the type of products that the undertakings involved sell and the area in which they sell them, additional products and areas will be included in, or excluded from, the market definition depending on whether competition from these other products and areas affect or restrain sufficiently the pricing of the parties’ products in the short term’.

129    In the context of the approach referred to above, paragraph 17 of the notice on market definition states:

‘The question to be answered is whether the … customers [of the parties to the concentration]would switch to readily available substitutes or to suppliers located elsewhere in response to a hypothetical small (in the range 5% to 10%) but permanent relative price increase in the products and areas being considered. If substitution were enough to make the price increase unprofitable because of the resulting loss of sales, additional substitutes and areas are included in the relevant market. This would be done until the set of products and geographical areas is such that small, permanent increases in relative prices would be profitable. …’

130    Paragraph 20 of the notice on market definition refers to supply substitution in the following terms:

‘Supply-side substitutability may also be taken into account when defining markets in those situations in which its effects are equivalent to those of demand substitution in terms of effectiveness and immediacy. This means that suppliers are able to switch production to the relevant products and market them in the short term … without incurring significant additional costs or risks in response to small and permanent changes in relative prices. When these conditions are met, the additional production that is put on the market will have a disciplinary effect on the competitive behaviour of the companies involved. Such an impact in terms of effectiveness and immediacy is equivalent to the demand substitution effect.’

131    Paragraph 21 of the notice on market definition states:

‘These situations typically arise when companies market a wide range of qualities or grades of one product; even if, for a given final customer or group of consumers, the different qualities are not substitutable, the different qualities will be grouped into one product market, provided that most of the suppliers are able to offer and sell the various qualities immediately and without the significant increases in costs described above. In such cases, the relevant product market will encompass all products that are substitutable in demand and supply, and the current sales of those products will be aggregated so as to give the total value or volume of the market. The same reasoning may lead to group different geographic areas.’

132    Conversely, paragraph 24 of the notice on market definition states:

‘The third source of competitive constraint, potential competition, is not taken into account when defining markets, since the conditions under which potential competition will actually represent an effective competitive constraint depend on the analysis of specific factors and circumstances related to the conditions of entry. If required, this analysis is only carried out at a subsequent stage, in general once the position of the companies involved in the relevant market has already been ascertained, and when such position gives rise to concerns from a competition point of view.’

133    The way in which the relevant market in the particular sector of scheduled passenger air transport should be defined in the context of the application of Article 82 EC has already been specified by the Courts of the European Union.

134    In accordance with the case-law, Article 82 EC may, in certain conditions, cover the application of tariffs for scheduled flights on a particular route or routes where those tariffs were fixed by bilateral or multilateral agreements concluded between air carriers, provided that the conditions laid down in that article are satisfied (see, by analogy, judgment of 11 April 1989 in Saeed Flugreisen and Silver Line Reisebüro, 66/86, ECR, EU:C:1989:140, paragraph 38).

135    In order to determine whether an airline operating scheduled flights has a dominant position on the market it is necessary first to define the relevant market in transport services. There are two possible approaches in that regard: the first is that the sector of scheduled flights constitutes a separate market; the second is that alternative possibilities, such as charter flights, the railways and road transport, should be taken into account, as well as scheduled flights on other routes that might serve as substitutes (see, by analogy, judgment in Saeed Flugreisen and Silver Line Reisebüro, cited in paragraph 134 above, EU:C:1989:140, paragraph 39).

136    The test to be employed in that respect is whether the scheduled flight on a particular route can be distinguished from the possible alternatives by virtue of specific characteristics as a result of which it is not interchangeable with those alternatives and is affected only to an insignificant degree by them (see, by analogy, judgment in Saeed Flugreisen and Silver Line Reisebüro, cited in paragraph 134 above, EU:C:1989:140, paragraph 40).

137    The application of that test does not necessarily yield identical results in the various cases which may arise; indeed, some airline routes are in a situation where no effective competition is likely to arise. In principle, however, and in particular as far as intra-Community routes are concerned, the economic strength of an airline on a route served by scheduled flights may depend on the competitive position of other carriers operating on the same route or on a route capable of serving as a substitute (see, by analogy, judgment in Saeed Flugreisen and Silver Line Reisebüro, cited in paragraph 134 above, EU:C:1989:140, paragraph 41).

138    As is apparent from the contested decision, the Commission has developed, in the context of the control of mergers in the scheduled passenger air transport sector, the O&D approach, which corresponds to a city pair ‘point or origin/point of destination’ approach and which reflects the perspective of demand according to which consumers envisage all possible options, including different forms of transport, in order to travel from a city of origin to a city of destination. According to that approach, that combination of a point of origin and a point of destination forms a distinct market. As the Commission points out, the O&D approach is recognised by the national competition authorities (see, for example, Decision 09-DCC‑17 of the French Competition Authority of 7 July 2009 in Financière LMP SAS/Financière Linair SAS/Brit Air SA, paragraph 22, and also the Decision of the Belgian Competition Council of 24 December 2004 in SN Airholding II/Virgin Express, paragraph 4.2).

139    The conformity of the O&D approach with the guidance to be found in the case-law was confirmed by this Court in the judgment of 19 May 1994 in Air France v Commission (T‑2/93, ECR, EU:T:1994:55, paragraph 84), and referred to more recently in the judgment of 4 July 2006 in easyJet v Commission (T‑177/04, ECR, EU:T:2006:187, paragraph 56). In that regard, it should be observed that in the judgment in easyJet v Commission (EU:T:2006:187) the contested decision related to a merger between two network airlines, namely Air France and KLM.

140    Accordingly, the complaint concerning the use of the O&D approach when defining the market may be rejected as unfounded on the sole basis of the case-law referred to above.

141    That finding is not called into question by the various arguments put forward by the applicant.

142    As regards, in the first place, the applicant’s argument that the Commission did not use the O&D approach in the Lufthansa/BMI decision, it should be observed that, when the Commission takes a decision on the compatibility of a concentration with the common market on the basis of a notification and a file pertaining to that transaction, an applicant is not entitled to call the Commission’s findings into question on the ground that they differ from those made previously in a different case, on the basis of a different notification and a different file, even where the markets at issue in the two cases are similar, or even identical. Thus, in so far as the applicant relies in this instance on assessments made by the Commission in a previous decision, that part of its argument is irrelevant (judgment of 14 December 2005 in General Electric v Commission, T‑210/01, ECR, EU:T:2005:456, paragraph 118).

143    Even on the assumption that that complaint could be classified instead as an allegation of a breach of the principle of the protection of legitimate expectations, economic operators have no grounds for a legitimate expectation that a previous practice in taking decisions that is capable of being varied will be maintained. A fortiori, they cannot plead such an expectation to challenge findings or assessments made in a given set of proceedings by invoking findings or assessments made in the context of just one previous case (judgment in General Electric v Commission, cited in paragraph 142 above, EU:T:2005:456, paragraph 119).

144    In any event, neither the Commission nor, a fortiori, the Court is bound in this instance by the findings of fact or economic assessments in the Lufthansa/BMI decision. Even on the assumption that the analysis in the two decisions differs without any objective justification for that difference, the Court ought to annul the contested decision only if that decision, as opposed to the Lufthansa/BMI decision, was vitiated by error (judgment in General Electric v Commission, cited in paragraph 142 above, EU:T:2005:456, paragraph 120).

145    As regards, in the second place, the applicant’s argument that the O&D approach used in the contested decision to define the relevant market does not correspond with the Commission’s definition of the relevant market in the decision on the restructuring plan, it should be borne in mind that, although each of those decisions dealt with the conditions in which Lufthansa took over Austrian, the fact none the less remains that they differ in both their subject-matter — the authorisation of State aid in one case and the authorisation of a concentration in the other — and their legal basis, the first subparagraph of Article 88(2) EC in one case and Article 2(2) of the Merger Regulation in the other.

146    When examining State aid that may be authorised in accordance with Article 87(3)(a) EC, the Commission must ensure that the aid in question will not alter trading conditions to an extent contrary to the common interest. The corrective measures that the Commission may impose in order to authorise such State aid are therefore closely related to the way in which the aid in question is capable of affective trading conditions. In the case of the decision on the restructuring plan, the aid in question is intended to ensure that Austrian is not indebted and forms part of a restructuring plan the purpose of which is ensure that airline’s return to long-term viability. The effects of that aid are therefore not limited to a particular market on which Austrian is present, but extend to its global situation. It is for that reason that the corrective measures imposed by the Commission in the decision on the restructuring plan, namely the reduction of the number of seats/km and the limitation of Austrian’s growth during a specific period, do not relate to a particular market, but rather to Austrian’s capacity to disrupt trading conditions in a global manner. It is thus stated in footnote 1 to the notice on market definition that ‘[t]he focus of assessment in State aid cases is the aid recipient and the industry/sector concerned rather than identification of competitive constraints faced by the aid recipient’.

147    In the context of the control of concentrations, on the other hand, the Commission must ensure, in accordance with Article 2(2) and (3) of the Merger Regulation, that the concentration will not significantly impede effective competition in the common market or in a substantial part of it. The focus of the assessment is then the effect of the concentration on the competitive constraint. It is for that reason that the commitments proposed by the notifying parties and accepted by the Commission in the contested decision are intended to remedy the competition concerns created by the concentration on the markets on which the parties competed before the concentration.

148    It follows that, contrary to the applicant’s submission, the definition of the relevant market in the contested decision, according to an O&D approach, is not inconsistent with the overall conception of the market capable of being affected by the State aid granted to Lufthansa in the decision on the restructuring plan.

149    As regards, in the third place, the applicant’s arguments that the Commission was wrong to justify the choice of the O&D approach for the purpose of defining the relevant market by the results of the market investigation, it must be held that, as the Commission rightly claims, those arguments were formulated for the first time in the reply.

150    However, it should be observed that those arguments are intended to call into question the Commission’s interpretation of the results of the market investigation which it produced for the first time in an annex to its defence. Such arguments must therefore be considered admissible under Article 48(2) of the Rules of Procedure, in that they are based on matters which came to light only in the course of the procedure (see, to that effect, judgment of 28 September 1999 in Yasse v EIB, T‑141/97, ECR-FP, EU:T:1999:177, paragraphs 126 to 128). It is therefore appropriate to examine the merits of those arguments.

151    First of all, the applicant claims that the Commission did not receive through the market investigation factual evidence that would have enabled it to ascertain whether the O&D approach was appropriate in the present case, but merely asked the operators questioned whether they approved of that approach, so that the choice of that method was determined solely by a poll of those operators.

152    In that regard, it should be observed that, as is apparent from paragraph 56 of the application, the applicant does not dispute the appropriateness of the O&D approach used by the Commission in previous merger cases. It thus recognises implicitly that the use of the O&D approach to identify the relevant market in the scheduled passenger air transport sector is an established practice. Furthermore, as pointed out in paragraph 139 above, this Court has held that the O&D approach constituted an appropriate approach for the purpose of defining the relevant market in the scheduled passenger air transport sector. In addition, it follows from Annex B1 to the defence, which corresponds to a part of the results of the market investigation carried out in the present case, that during phase I of the market investigation the Commission not only asked competitors, corporate customers and travel agencies whether they agreed with the traditional O&D approach based on demand side substitutability but that, in addition, it asked them to comment on their replies, which they did, as the applicant itself acknowledges. Consequently, contrary to the applicant’s contention, it cannot be considered that the market survey was limited in this instance to receiving the votes of the participants in the market investigation on the appropriateness of the O&D approach.

153    Next, the applicant maintains that the Commission was not entitled to use the responses from the operators questioned in the context of the market investigation to justify the use of the O&D approach, since, owing to the small number of operators questioned by comparison with the thousands of operators active on the relevant market, the market investigation was not representative.

154    In that regard, it should be observed that it is also clear from Annex B1 to the defence that the Commission questioned 31 undertakings that were competitors of the parties to the concentration, including the applicant, 35 corporate customers and 18 travel agencies. In order to assess the representativeness of the results of the market investigation on that point, it is appropriate to take account of the circumstances in which it was carried out.

155    As Annex B1 to the defence gives no indication of the total number of operators questioned by the Commission about the appropriateness of the O&D approach, or of the identity or the relative weight of the participants in the market investigation in the scheduled air passenger transport sector, the Court requested the Commission on 18 February 2013 to indicate what method had been used to ensure that the responses provided by the competitors, corporate customers and travel agencies in the context of the market investigation carried out during phase I of the examination of the concentration were representative.

156    In its response to that measure of organisation of procedure, the Commission stated that the undertakings which it had questioned in the context of the market investigation were the competitors, potential competitors and main independent customers of the parties to the concentration, whose details were supplied to it by the notifying parties, in accordance with paragraphs 7.3, 8.9 and 8.6 of Form CO in Annex I to Regulation No 802/2004 and referred to in Article 3(1) and Article 4(1) of that regulation. The Commission stated, on the basis of its own knowledge of the market, which it acquired through examining numerous other proposed mergers in the air transport sector, that among the undertakings in question were airlines competing with the parties to the concentration on the markets identified in the decision, and also the majority of corporate customers and main travel agencies. In addition, the Commission emphasised that, for the purposes of assessing the proposed concentration, the simple numerical ratio, that is the ratio between the positive answers and the negative answers to a question, was not decisive. Rather, the Commission undertakes a global assessment in which various factors may play a part, such as the reasons for the answer given, the knowledge which the undertaking consulted would be expected to have by reference to the circumstances (for example, the length of time an undertaking has been present on the market, its importance as a competitor or customer of the parties to the concentration, its actual sphere of activity) or the particular interests of each undertaking consulted (for example, the interest which a competitor may have in preventing the concentration, in view of its own policy of expansion or its interest in buying slots made available where commitments are given). In the Commission’s submission, in order to obtain the most representative picture possible of the market conditions, it also approached other advised market players (for example, airports, air traffic authorities and slot coordinators). In addition, according to the Commission, is the economic analysis of objective data. The Commission also stated that the representativeness of the market investigation was also ensured by the publication of the notification of the concentration, as referred to in Article 4(3) of Regulation No 139/004, whereby third parties are invited to submit to the Commission any comments which they may have on the proposed concentration.

157    Invited at the hearing to adopt a position on the additional information supplied by the Commission as to the representativeness of the market investigation, the applicant merely claimed that, in so far as the identities of the participants in the market investigation were not disclosed, it was not possible to determine whether they were active on the routes at issue and therefore whether the market investigation was representative.

158    In that regard, it is sufficient to observe that, contrary to what the applicant appears to believe, the market investigation is not limited to competitors of the notifying parties on the relevant geographic market, but also extends to potential competitors and also to customers of the notifying parties on that market.

159    In those circumstances, the Court considers that the applicant’s assertion that the market investigation was not representative must be rejected as unfounded.

160    Last, the applicant’s argument that the Commission did not take account of the fact that in the context of the market investigation a large number of competitors expressed the need to take account of the network effects must also be rejected.

161    It should be observed that, as is apparent from Annex B1 to the defence, phase I of the market investigation revealed that a large majority of the participants in the market investigation (22 out of 31 competitors, 15 out of 18 travel agencies and 31 out of 35 corporate customers) stated that they agreed with the traditional O&D approach based on demand-side substitutability.

162    It is also apparent from Annex B1 to the defence that, among the 31 competitors who answered question 7 in the market investigation, the purpose of which was to determine whether they agreed with the use of the O&D method, six clearly expressed doubts as to the ability of that approach to take account of competition between networks (in fact participants nos 2, 3, 12, 19, 22 and 30 in the market investigation) the three voiced their concerns about the strengthening of the position of the merged entity at a given airport (in fact participants nos 4, 7 and 10 in the market investigation). Of the six participants in the market investigation who expressed doubts as to the ability of the O&D approach to take account of competition between networks, three, however, answered the question in the affirmative (in fact participants nos 2, 12 and 19 in the market investigation). Of the three participants in the market investigation who disclosed their concerns as to the strengthening of the position of the merged entity at an airport, one answered question 7 in the affirmative (participant no 7 in the market investigation). It follows that of the nine participants in the market investigation who voiced their concerns as to the need to take account of competition between networks and of the importance of the position of the merged entity at certain airports, only five answered question 7 in the negative.

163    It also follows from Annex B1 to the defence that none of the travel agencies or corporate customers who answered question 7 expressed the least concern as to the need to take competition between the networks of the airlines into account.

164    It follows that, out of 81 participants in the market investigation, only five revealed their disagreement with the O&D approach, on the ground that it did not allow the network effects to be taken into account.

165    Furthermore, it must be stated that Commission referred, in recital 269 to the contested decision, to the concerns of certain participants in the market investigation during phase I of that investigation with respect to ‘the strong market position of [Lufthansa] and [Austrian] in [the Central and Eastern European market], concerning mainly the post-transactional control by [Lufthansa][ of a very substantial part of a so-called Central European market, particularly as a result of their control of the most important hubs catering [for Central and Eastern Europe] and their well-developed networks concerning this area’. It none the less stated that ‘[t]he results of the more refined phase II market investigation showed, however, that the vast majority of corporate customers in particular do not see any negative impact in relation to a potentially strengthened position of the merged entity for flights serving [Central and Eastern Europe] and indicated existing alternative competitors’.

166    In those circumstances, the applicant’s argument that the Commission did not take account of the comments of numerous competitors that the O&D approach did not enable competition between the networks to be assessed must be rejected as unfounded.

167    As regards, in the fourth and last place, the applicant’s argument that the idea that competition between airlines takes place exclusively on certain specific routes is disproved by the existence of loyalty programmes and systems of discounts for business customers, travel agencies and tour operators, it should be observed that it was put forward for the first time in the applicant’s observations on the statements in intervention of the Republic of Austria and Lufthansa. It should also be observed that that argument was not intended to respond to a specific argument of the interveners. Therefore, in so far as the applicant has not pleaded any matters of law or of fact which came to light in the course of the procedure to justify the delay in raising that argument, it must be considered inadmissible, on the ground that it is out of time, in the light of the requirements of Article 44(1) and Article 48(2) of the Rules of Procedure, taken together (see, to that effect, judgment of 8 March 2007 in France Télécom v Commission, T‑340/04, ECR, EU:T:2007:81, paragraph 164).

168    In the light of the foregoing considerations, it must be held that the applicant has failed to show that the Commission made a manifest error of assessment in using the O&D approach when defining the relevant market.

 The failure to analyse the competitive effects of the concentration on the relevant geographic market defined according to a ‘global approach’

169    The applicant takes issue with the Commission for having failed to examine the competitive effects of the concentration at issue on the relevant geographic market defined according to a global approach as extending throughout the area in which Lufthansa and Austrian operate their networks or offer access to their networks through hubs or bases. Such an approach makes it possible to take account of demand-side substitutability, on the basis of customer expectations, and also of supply-side substitutability, on the basis of the structure of the air carriers’ offer.

170    As regards the structure of the air carriers’ offer, the applicant maintains that an air carrier’s network is a decisive factor for business customers and also for travel agencies and tour operators. Likewise, an air carrier’s network organisation enables it to attract more passengers from small airports by providing them with access to hubs from which they have a large choice of destinations. The structure of the offer is further affected, in particular on the market for the direct sales of flights in the tourism sector, by a network airline’s ability to apply predatory pricing on certain routes.

171    In the applicant’s submission, only that global approach to the relevant geographic market makes it possible to understand the strengthening of the factors of market domination in favour of the merged entity in question, whereas those factors were not taken into account by the Commission on the ‘market throughout Central Europe’ or on the ‘regional market between Austria and Germany’.

172    In that regard, it should be borne in mind that, pursuant to Article 2 of the Merger Regulation, the Commission is required to examine the competitive effects of a concentration on the markets for which there is a risk that effective competition will be significantly impeded, in particular by the creation or strengthening of a dominant position (see, to that effect, judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 63).

173    Although the Commission’s competitive analysis may be oriented, in part, towards the concerns raised by the third parties consulted during the administrative procedure, it is bound, even in the absence of any express request by such third parties, but where there are serious indicia to that effect, to assess the competition concerns created by the merger on all the markets which may be affected by it (see, to that effect, judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 64).

174    However, where it is alleged that the Commission failed to have regard to a possible competition concern on markets other than those covered by the competitive analysis, it is for the applicant to adduce serious indicia of the genuine existence of a competition concern which, by reason of its effect, should have been examined by the Commission (see, to that effect, judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 65).

175    In order to discharge that burden, the applicant should identify the relevant markets, describe the state of competition in the absence of the merger and indicate what would be the likely effects of a merger given the state of competition on those markets (see, to that effect, judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 66).

176    In that regard, it should also be borne in mind that, in accordance with Section 6 of Form CO in Annex I to Regulation No 802/2004, under heading ‘II. Relevant geographic markets’, the relevant geographic market comprises the area in which the undertakings concerned are involved in the supply and demand of relevant products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring geographic areas because, in particular, conditions of competition are appreciably different in those areas. It is made clear that factors relevant to the definition of the relevant geographic market include inter alia the nature and characteristics of the products or services concerned, the existence of entry barriers, consumer preferences, appreciable differences in the undertakings’ market shares between neighbouring geographic areas, or substantial price differences.

177    In the present case, however, it should be observed, in the first place, that the definition of the geographic market as proposed by the applicant lacks precision in its very wording.

178    In fact, that definition is based on the notion that the relevant market extends to all the geographic areas from which it is possible to gain access to the networks of Lufthansa and Austrian. However, the applicant does not clearly state whether it is referring here to the geographic areas from which it is possible to gain access to both networks or only to the geographic areas from which it is possible to gain access to one of them. Nor does it state whether the point of access to the network is necessarily an airport. The applicant also fails to state how the extent of the geographic area around a point of access to the network must be determined.

179    In addition, as the Commission correctly observes, the applicant refers in different parts of its pleadings to different geographic markets. Thus, in paragraph 47 of the application, the applicant maintains that Lufthansa has always had a dominant position on the ‘Central European market’. In paragraphs 48 and 49 of the application, the applicant states that that dominant position, which was strengthened by Lufthansa’s purchase of Swiss and SN Brussels and by the creation of Lufthansa Italia, would be further strengthened by the purchase of Austrian. According to the applicant, those transactions would enable Lufthansa to be assured ‘of control of the markets in Germany, Switzerland, Belgium, Northern Italy and Austria’. The applicant also submits that that assertion does not even take account of the fact that Lufthansa dominates the ‘Scandinavian market’ through Scandinavian Airlines System (SAS), and also ‘air traffic between Central Europe and Eastern Europe’. Furthermore, in paragraph 25 of the reply, the applicant maintains that the concentration will enable Lufthansa to acquire ‘a dominant position at Vienna-Schwechat airport similar to the dominant position it has at Frankfurt[-am-Main] airport (where Lufthansa has 59% of passenger traffic) and Zurich airport (where Lufthansa and Swiss have more than 60% of passenger traffic)’.

180    Furthermore, in paragraph 70 of the application, the applicant maintains, in essence, that the global approach to the relevant geographic market would, unlike the O&D approach, have made it possible to take the competitive effects of the concentration on the regional market between Germany and Austrian into account.

181    The geographic size of the market with regard to which the competitive effects of the concentration must be analysed therefore varies according to the applicant’s own pleadings from one airport to an entire continent, via the territory of two Member States, a single Member State or part of the territory of one Member State.

182    In the second place, the description of the pre-merger competitive position on the relevant geographic market, as defined by the applicant, is also confused.

183    With respect to the competitive situation on the market in the whole of Central Europe, the applicant merely refers in the reply to what it calls the ‘market domination factors’ held by Lufthansa and Austrian before the concentration, namely the number of hubs, the number of slots at the various airports, the air traffic rights to Eastern Europe and the Middle East held by Lufthansa and Austrian, the size of the fleet, the strength of the capital, the existence of a customer loyalty programme, the ability to enter into framework agreements with business customers, tour operators and travel agencies, and also the possibility of obtaining advantageous supply contracts with undertakings providing the operational means or the infrastructures necessary for airline operations.

184    However, the applicant fails to draw the slightest comparison in that regard with the situation of other network air carrier operating in Central Europe and merely claims that the merged entity will be the only network air carrier capable of providing routes from Central Europe to destinations within the European Union and in Eastern Europe and also transcontinental routes.

185    Furthermore, concerning the competitive situation on what it calls the ‘market for routes between Germany and Austria’, the applicant claims, in a contradictory fashion, that the notifying parties shared traffic between Austrian regional airports and Germany through their joint venture (paragraph 71 of the application) and that they competed on routes between those airports and Germany, in particular on the Graz-Kiev (Ukraine) and Linz-Paris routes, on which Lufthansa and Austrian both offer connecting flights, using their respective hubs in Vienna and Frankfurt-am-Main (paragraph 72 of the application). In addition, the applicant gives no indication of whether travellers departing from the Austrian regional airports would be able to use the services of a network airline other than Lufthansa or Austrian on those routes.

186    It follows that the arguments put forward by the applicant in support of the assertion that the Commission wrongly failed to analyse the competitive effects of the concentration on ‘the entire Central European market’ do not satisfy the requirements of the case-law cited in paragraph 175 above.

187    In those circumstances, it must be held that the applicant has failed to define with sufficient precision the relevant geographic market which it claims to exist and that, accordingly, it is impossible for the Court to determine whether it was necessary for the Commission to examine the potential competitive effects of the concentration at issue on that market.

188    In those circumstances, the first part of the first plea must be rejected as unfounded.

 Second part of the first plea, alleging a manifest error of assessment as regards the competitive effects of the concentration on routes between Germany and Austria

189    The applicant takes issue with the Commission, in essence, for not having taken account of the negative effects of the concentration on all routes between Germany and Austria.

190    In that regard, it should first of all be observed that, contrary to the applicant’s assertions, it is apparent from recital 107 to the contested decision that the Commission analysed the effects of the concentration not only on the 23 routes between Austria and Germany with direct overlaps between Lufthansa’s and Austrian’s services, but also on the routes with indirect-indirect overlaps such as those described by the applicant.

191    Next, it should be observed that, contrary to the applicant’s claim, the Commission took account of the pre-merger cost and revenue sharing joint venture between Lufthansa and Austrian in the context of its competitive analysis of all routes between Austria and Germany, by way of a counterfactual scenario (recitals 64 to 69, 113 to 116, 129 to 133, 145, 159 to 169, 191 and 210 to the contested decision), with the exception of the Vienna-Berlin, Vienna-Düsseldorf, Vienna-Hamburg (Germany), Vienna-Hanover (Germany) and Vienna-Nuremberg (Germany) routes (recital 185 to the contested decision) and the Munich-Linz route (recital 189 to the contested decision). The reason why the Commission did not take account of the joint venture in the context of the competitive analysis of the latter routes is that it had previously found that the competitors of the parties to the concentration held significant shares of the market on those routes, which made it unlikely that competition concerns in relation to the concentration on those routes would arise.

192    Last, it should also be observed, with respect to the applicant’s argument that the Commission did not take account of the number of flights operated by Lufthansa and Austrian on the Vienna-Berlin and Vienna-Hamburg routes when examining the competitive situation on those routes, that it follows from recital 185 to the contested decision that the Commission found that the market share of Air Berlin, expressed as a percentage of the total number of time-sensitive or non-time-sensitive passengers, was within a range of 70% to 80% on the Vienna-Hamburg route and 80% to 90% on the Vienna-Berlin route in the winter of 2008/2009, that is to say, before the adoption of the contested decision. Those figures showed, moreover, a slight but significant increase in Air Berlin’s market share by comparison with the summer of 2008, when Air Berlin had carried only 70% to 80% of passengers on the Vienna-Berlin route. The argument that Lufthansa and Austrian operated more flights than Air Berlin during that period is irrelevant in that regard, since market shares are correctly expressed by reference to the number of passengers carried. Furthermore, the fact that Lufthansa and Austrian deliberately chose to reduce their capacity on those routes, on the assumption that it is shown to be correct, is not such as to call the Commission’s competitive analysis into question. When analysing the pre-merger competitive situation on a particular route, the Commission is required to evaluate competitors’ actual market shares and not their potential market shares.

193    In the light of the foregoing considerations, the second part of the first plea must be rejected as unfounded.

 Third part of the first plea, alleging a manifest error of assessment in relation to the consequences of the concentration on air routes between Central Europe and Eastern Europe outside the European Union

194    In the context of the third part of the first plea, the applicant puts forward three separate complaints. The first complaint alleges that in the contested decision the Commission did not analyse the effects of the concentration on air routes between Central Europe and Eastern Europe outside the European Union on the basis of the O&D approach. The second complaint alleges that the Commission did not take account of the dominant position held by Lufthansa and Austrian on routes between, on the one hand, Vienna, Frankfurt-am-Main, Munich and Zurich airports and, on the other, the airports of Eastern Europe outside the European Union.

195    The third complaint, alleging that the Commission did not impose in the contested decision any condition or charge such as to ensure that the airlines competing with Austrian or Lufthansa will be given bilateral air traffic rights so that those airlines can begin to operate on the air routes to Eastern Europe, does not concern the analysis of the effects of the concentration on routes between Central Europe and Eastern Europe, but what is alleged to be the insufficiency of the commitments accepted by the Commission in the contested decision in the light of the competition concerns created by the concentration of which the applicant complains. It will therefore be necessary to examine this complaint, should that prove necessary, in the context of the fourth part of the present plea, consisting of the complaints relating to what is alleged to be the insufficiency of the commitments given by the parties to the concentration in the contested decision.

 First complaint, alleging that the Commission did not analyse the effects of the concentration on air routes between Central Europe and Eastern Europe outside the European Union on the basis of the O&D approach

196    As a preliminary point, the arguments whereby the applicant seeks to show that the Commission did not use the O&D approach with respect to routes between Central Europe and Eastern Europe, which were first put forward in the applicant’s observations on the statements in intervention of the Republic of Austria and Lufthansa, must be rejected as inadmissible, on the ground that they were submitted out of time, in accordance with the case-law cited in paragraph 167 above.

197    Furthermore, it should be borne in mind that the O&D approach is not a method of analysing competition, but simply the method used by the Commission in order to identify the relevant market on which the impact of the concentration should be analysed. It is apparent from the contested decision that, in accordance with that method, the Commission identified the routes on which the services provided by Lufthansa and Austrian overlapped.

198    Thus, it is apparent from recital 107 to the contested decision that the Commission identified 28 direct-direct overlaps, none of which related to a route between a Central European airport and an airport in Eastern Europe outside the European Union. The Commission then analysed the impact of the concentration on those overlaps, in recitals 108 to 266 to the contested decision.

199    In addition, it is apparent from recital 267 to the contested decision that the Commission also identified direct-indirect and indirect-indirect overlaps relating to routes between European airports and between European and non-European airports.

200    In that regard, the Commission stated in recital 268 to the contested decision:

‘The routes were analysed with respect to the market position of the parties and the market share increment brought about by the transaction. Furthermore, the presence and position of competitors and the number of passengers on each route were assessed. Where necessary, the number and duration of frequencies offered by competitors and their suitability for time-sensitive passengers, in particular, were assessed. On the basis of these criteria, no competition concerns were identified, in addition the market investigation did not reveal any competition concerns with respect to the identified direct/indirect and indirect/indirect overlaps with the exception of [Lufthansa]’s and [Austrian]’s market position in Central and Eastern Europe …’

201    In spite of the somewhat elliptical terms in which it is drafted, it may be inferred from recital 268 to the contested decision that the Commission did indeed identify direct-indirect overlaps and indirect-indirect overlaps between Lufthansa’s and Austrian’s services on routes between Central European airports and Eastern European airports in respect of which it analysed the impact of the concentration, which, unlike the market study, had not revealed any competition concerns.

202    This first complaint must therefore be rejected as unfounded.

 Second complaint, alleging that the Commission did not take account of the dominant position held by Lufthansa and Austrian on routes between, on the one hand, the airports in Vienna, Frankfurt-am-Main, Munich and Zurich and, on the other, the airports in Eastern Europe outside the European Union

203    It should be observed, in the first place, that the applicant does not precisely identify the routes on which the parties to the concentration hold a dominant position. The applicant merely refers generally, in paragraph 78 of the application, to the routes between, on the one hand, Vienna, Frankfurt-am-Main, Munich and Zurich airports and, on the other, airports of cities in Eastern Europe such as Kiev, Moscow (Russia) and Saint Petersburg (Russia). Furthermore, the figures relating to the number of weekly flights offered by Lufthansa, Swiss and Austrian from Munich, Frankfurt-am-Main, Zurich and Vienna airports to airports in Eastern Europe, as provided by the applicant, are aggregate figures which give no indication of the number of flights per week offered by one of those airlines on a specific route. Nor do those figures express the number of passengers carried, which is traditionally the indicator for calculating the market share of an air carrier on a particular route. Furthermore, the applicant does not maintain that the dominant position which it claims will be held by the merged entity on certain routes between Central European and Eastern Europe is the result of the concentration in that the concentration would have the effect of eliminating existing competition between Austrian and Lufthansa on those routes.

204    It appears in reality that the applicant’s complaint is that the Commission did not take account, in its analysis of the impact of the concentration, of the fact that Lufthansa and Austrian are firmly established at Vienna, Frankfurt-am-Main, Munich and Zurich airports, from which they serve destinations in Eastern Europe, and that passengers wishing to travel to Eastern Europe from Central Europe have no choice other than to use Austrian or Lufthansa.

205    In that regard, it is apparent from recital 269 to the contested decision that such concerns were raised in phase I of the market investigation by certain participants in that investigation, but that they were answered in phase II, as the vast majority of corporate customers saw no negative impact in a potentially strengthened position of the merged entity for flights serving Central and Eastern Europe and indicated existing alternative competitors.

206    The Commission stated in recital 270 to the contested decision that there appeared to be significant competitors serving Central and Eastern Europe, in particular Air France-KLM, which served 15 destinations in Central and Eastern Europe using its own network and 11 other destinations in cooperation with its SkyTeam partners Aeroflot and CSA, and also British Airways, which served 13 destinations in Central and Eastern Europe using its own network, and Malev, which served 22 destinations in Central and Eastern Europe.

207    In that regard, the applicant maintains that the merged entity would not face sufficient competitive pressure on routes between Vienna, Frankfurt-am-Main, Munich and Zurich airports, on the one hand, and airports in Eastern Europe, in particular Moscow, on the other, whether from Air France-KLM, British Airways, Malev or CSA, since those airlines offer only flights with connections, which considerably add to the duration and distance of the flight on those routes.

208    As regards the level of substitutability between direct flights and indirect flights, it should be observed that the Commission indicated, in recital 24 to the contested decision, that that depends on the duration of the flight. Thus, the longer the flight, the higher the likelihood that indirect flights exert a competitive constraint on direct flights. The Commission then stated that, in the present case, the market investigation had confirmed the finding in previous decisions that, for short-haul flights, that is to say, flights of less than three hours, indirect flights did not generally constitute a competitive alternative for direct flights, as customers indeed prefer direct flights.

209    It is common ground that direct flights between Vienna and Moscow, Saint Petersburg or Kiev, and direct Zurich-Kiev, Frankfurt-am-Main-Kiev, Munich-Saint-Petersburg and Munich-Kiev flights last less than three hours. In those circumstances, the indirect flights offered by Air France-KLM, British Airways, Malev and CSA or all the other Eastern European airlines are not competitive alternatives to the direct flights offered by Austrian or Lufthansa on those routes. However, in recital 271 to the contested decision, the Commission states that the market investigation confirmed the finding that Eastern European carriers can also provide an alternative to Lufthansa and Austrian, since the investigation revealed that the vast majority of travel agents compared those airlines’ prices with the prices of alternative carriers, including Eastern European carriers. The Commission also stated that the market investigation revealed that the majority of corporate customers indicated that they did not buy flights from one airline in particular but that, depending on the destination in Central and Eastern Europe, they searched for flight alternatives with other carriers, including Eastern European carriers. The applicant does not maintain, nor does it demonstrate, that no other Eastern European airline, in particular Russian or Ukrainian airlines, provided direct flights on the routes in question at the date of the contested decision.

210    The applicant acknowledges in the reply, moreover, the existence of direct flights on the Vienna-Moscow route provided by the airlines Transaero and Aeroflot.

211    In that regard, the applicant’s argument that the provision of flights by those airlines is not competitive owing to the small number of flights per week and their timetables, which are not suitable for Austrian business customers, is unconvincing. It must be held that the applicant has adduced to evidence in respect. In addition, business customers generally represent only a proportion of passengers interested in a particular route and it is therefore impossible to draw conclusions from the alleged preferences of those customers without knowing the proportion of the total number of passengers between Vienna and Moscow which they represent.

212    The applicant has therefore failed to demonstrate that the merged entity would not be subject to sufficient competitive pressure on the routes between Vienna and Moscow, Saint-Petersburg or Kiev, or on the Zurich-Kiev, Frankfurt-am-Main-Kiev, Munich-Saint-Petersburg and Munich-Kiev routes.

213    That finding also applies to the medium-haul Zurich-Moscow, Zurich-Saint-Petersburg, Frankfurt-am-Main-Moscow, Frankfurt-am-Main-Saint-Petersburg, Munich-Moscow and Munich-Saint-Petersburg routes, in respect of which it cannot be precluded that other Eastern European carriers provide direct flights. In addition, the Commission stated in recital 26 to the contested decision that certain participants in the market investigation had indicated that indirect flights, in certain circumstances, constituted a competitive alternative. Accordingly, the applicant has also failed to show that the merged entity would not be subject to sufficient competitive pressure on those routes.

214    The applicant also maintains that, contrary to the Commission’s contention, the provision of flights by CSA and Malev does not represent a credible alternative to the provision of connecting flights by Austrian and Lufthansa for persons wishing to travel from Austrian regional airports to Eastern European airports.

215    In fact, according to the applicant, there are no direct flights from Austrian regional airports, namely the airports at Graz, Linz, Innsbruck, Salzburg and Klagenfurt, to CSA’s and Malev’s hubs, in Prague (Czech Republic) and Budapest (Hungary) respectively. It follows that passengers living near those Austrian regional airports who wish to travel from one of those airports to a destination in Eastern Europe would, in order to use flights provided by Malev and CSA, first of all have to take a flight to Vienna and then fly from there to Prague or Budapest, from where they could eventually travel to their destination in Eastern Europe. That means that the flights provided by those two airlines are not particularly competitive for those passengers by comparison with the flights provided by Austrian and Lufthansa, which makes it possible to travel from those Austrian regional airports to their hubs in Vienna, Frankfurt-am-Main, Munich and Zurich and then from there to a destination in Eastern Europe.

216    In that regard, it should be observed that the applicant gives no indications of the destinations in Eastern Europe to which it refers, with the consequence that it is not possible to identify the routes between Austrian regional airports and those destinations on which it maintains that the effects of the concentration were not taken into account by the Commission.

217    It should be considered, moreover, that the competition between indirect flights available on the same route must be distinguished, by its nature, from the competition between direct flights or even competition between direct flights and indirect flights. It seems unlikely that Austrian would increase the number of flights between Austrian regional airports and Vienna or reduce the tariffs on its flights on those routes in the light of demand for flights between those airports and destinations in Eastern Europe, since passengers travelling from those regional airports to such destinations probably represent only a small proportion of the total number seeking a direct flight between the regional airports and Vienna. The same applies to Malev and CSA as concerns flights between Vienna and Budapest and between Vienna and Prague, the tariff and frequency of which are unlikely to vary according to demand for flights between the Austrian airports and destinations in Eastern Europe. In that context, competition between the indirect flights available on the same route depends on numerous factors, such as the duration of the flight between the various points of the journey, the duration of stopovers, the total price or again the departure times. In those circumstances, it cannot be precluded outright that the flights offered by CSA and Malev on the routes in question, although they may be less practical than those offered by Austrian, may constitute credible alternatives to Austrian’s flights.

218    In the light of the foregoing considerations, the complaint whereby the applicant alleges that the Commission did not take account, when analysing the consequences of the concentration on competition, of the fact that Austrian and Lufthansa have a number of hubs in Central Europe from which they provide flights to Eastern Europe, must be rejected as unfounded.

219    The third part of the first plea is therefore unfounded.

 Fourth part of the first plea, alleging a manifest error of assessment as to the ability of Lufthansa’s and Austrian’s competitors to remain on or to enter the relevant market

220    The fourth part of the first plea consists of five complaints. The first and second complaints allege breach of paragraph 36 and paragraph 31 respectively of the 2004 Guidelines. The third, fourth and fifth complaints allege breach of paragraph 68 et seq. of those guidelines.

 First complaint, alleging breach of paragraph 36 of the 2004 Guidelines in that the Commission did not take account of the fact that the concentration limited competitors’ ability to sell flights to business customers and to enter into framework agreements with travel agencies and tour operators

221    The applicant takes issue with the Commission, in essence, for having breached paragraph 36 of the 2004 Guidelines by authorising the concentration, when the concentration, owing to the combination of Lufthansa’s and Austrian’s networks and the increase in the offer of routes which it will entail, will have the effect of limiting the ability of other air carriers to sell flights to business customers and to enter into framework agreements with travel agencies and tour operators.

222    The arguments which the applicant puts forward in support of this complaint cannot be upheld.

223    Thus, as regards, in the first place, the alleged limitation of the ability of other air carriers to operate in the business travel sector, it should be observed that Annex B4 to the defence contains the responses of the corporate customers to question 13 in the questionnaire sent to them on 15 May 2009, which concerned the impact of the systems of discounts and rebates proposed, in particular, by Lufthansa and Austrian on the loyalty of business customers. It must be stated that it follows from those responses that a majority of participants in the market investigation state that they do not use Lufthansa’s and Austrian’s services exclusively and that the discounts offered by those airlines are not sufficient to remove the possibility that they will use a different carrier.

224    It should also be observed that Annex B5 to the defence contains the responses of corporate customers to questions 71, 73, 76, 79 and 80 which the Commission sent them in phase II of the market investigation. In that regard, it should be observed that question 71 related to the assessment, by corporate customers, of the Eastern European airlines as serious alternatives for journeys to Central and Eastern Europe and the Middle East. It must be stated that 22 out of 31 participants in the market investigation answered that question in the affirmative.

225    It follows that, contrary to the applicant’s assertion, it is apparent from the market investigation that business customers regarded certain competitors of Lufthansa and Austrian as credible alternatives to the flights which the latter airlines are able to offer because of their networks.

226    As regards, in the second place, the alleged limitation of the ability of other carriers to enter into framework agreements with travel agencies and tour operators, it should be observed that it follows from Annex B2 to the defence, on which the Commission relies, that in answer to questions 2 and 3 in the questionnaire sent to corporate customers on 15 May 2009 in the context of phase I of the examination of the concentration, the great majority of the 38 participants in the investigation stated that they had no exclusive business relationship with an air carrier or a particular alliance, but that, on the contrary, they maintained commercial relationships, in particular by entering into framework agreements, with multiple carriers and alliances.

227    In fact, such a finding gives no indication as to whether travel agencies adopt the same type of commercial policy.

228    However, it should be observed that Annex B3 to the defence indicates the percentage, in number of tickets and value, represented by Lufthansa and Austrian airline tickets of all airline tickets sold in 2007 and 2008 by travel agencies which responded to the questionnaire of 13 May 2009.

229    In that regard, it should be noted that those percentage, which were drawn up by the Commission’s staff, relate to all tickets sold by each of the entities that responded to the questionnaire. On that basis, the applicant claims that the travel agencies questioned purchased on average 58.2% in 2007 and 53.7% in 2008 of the tickets sold by Lufthansa and Austrian. If the applicant’s calculation is correct, the figures resulting from the calculation do not represent the percentage of tickets issued by Lufthansa and Austrian purchased by travel agencies, but the percentage of tickets which the travel agencies which responded to the questionnaire purchased from Lufthansa and Austrian.

230    Furthermore, although that percentage is high, it shows that the travel agencies that responded to the questionnaire do not have an exclusive business relationship with Lufthansa and Austrian.

231    As regards the applicant’s argument that that percentage shows that Lufthansa will have a dominant position in Central Europe after the concentration, it should be observed that, as the Commission correctly claims, the contested decision does not contain any analysis of a market for the sale of airline tickets by travel agencies and that the applicant has not thus far alleged that such a market exists.

232    In the light of the foregoing considerations, the complaint alleging breach of paragraph 36 of the 2004 Guidelines must be rejected as unfounded.

 Second complaint, alleging breach of paragraph 31 of the 2004 Guidelines, in that the Commission did not take account of the fact that the merged entity will be the only network airline able to offer its customers a complete network of routes throughout the world, and in particular in Eastern Europe

233    The applicant maintains that the Commission breached paragraph 31 of the 2004 Guidelines by approving the concentration when, following the concentration, Lufthansa will be the only network airline capable of offering its customers a complete network of routes throughout the world, and in particular in Eastern Europe. Business customers, travel agencies and tour operators which in one case need to have a complete network of routes and in the other cases need to be able to offer their customers routes throughout the world would have no choice other than to enter into framework agreements with Lufthansa.

234    In that regard, it should be borne in mind that, in paragraph 31 of the 2004 Guidelines, the Commission describes a potential anti-competitive effect of the horizontal concentrations, namely the fact that customers have few possibilities of changing supplier. Thus, the Commission states that customers of the parties to a concentration may have difficulties switching to other suppliers because there are few alternative suppliers or because they face substantial switching costs. Such customers are particularly vulnerable to price increases. The merger may affect these customers’ ability to protect themselves against price increases. In particular, this may be the case for customers that have used dual sourcing from the two merging firms as a means of obtaining competitive prices. Evidence of past customer switching patterns and reactions to price changes may provide important information in this respect (paragraph 31 of the 2004 Guidelines).

235    However, it should be observed that the applicant has not shown that the fact of having a network of routes as complete as Lufthansa’s constitutes an essential precondition of the conclusion of framework agreements with travel agencies and tour operators.

236    Furthermore, it follows from Annex B2 to the defence that the vast majority of business customers who responded to questions 2 and 3 in the questionnaire sent to them by the Commission in phase I of the market investigation stated that they had entered into framework agreements with airlines other than Lufthansa and Austrian and members of an alliance other than Star Alliance, such as Air Berlin-Fly Niki, British Airways, Air France-KLM, CSA, Malev, Alitalia, Emirates, Finnair or Iberia. The applicant puts forward no argument of such a kind as to call that finding into question.

237    Accordingly, it must be held that the Commission could reasonably consider that the concentration at issue did not have the effect of depriving business customers, tour operators and travel agencies of alternative operators without breaching paragraph 31 of the 2004 Guidelines and that this complaint must therefore be rejected as unfounded.

 Third complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the fact that the offer proposed by the merged entity will cover the entire demand available on the routes which the notifying parties dominate

238    The applicant claims, in essence, that market entry is conditional on the existence of demand for additional flights that could be provided by a new competitor. Lufthansa’s and Austrian’s offer, in terms of number of flights, slots and number of seats offered, is such that it covers all demand on routes which they dominate together or individually and that it would therefore be impossible for a new competitor to enter one of those routes.

239    In that regard, it should be observed that the applicant does not maintain that there is overcapacity on the routes dominated by Lufthansa and Austrian, but only that the latter airlines’ supply covers all demand on those routes. However, the existence of an offer of Lufthansa or Austrian flights on a particular route, no matter how large, cannot in itself preclude the possibility that a new competitor will enter that route successfully by offering specific services or more advantageous tariffs, in such a way as to take for itself part of the demand, or to find new potential customers.

240    Accordingly, the applicant’s argument that Lufthansa’s or Austrian’s supply on the routes which they dominate would constitute a barrier to entry to the market must be rejected.

241    On the other hand, the fact of having a significant number of slots at critical times of the day, for example in the morning or in the evening, is capable of being of great importance for a proportion of customers, in particular business customers, and is therefore a decisive condition for ensuring the profitability of the operation of an air route.

242    The example of the Vienna-Brussels route chosen by the applicant is relevant in that respect, since it follows from the contested decision that the Commission recognised the existence of competition concerns on that route from the aspect of the concentration, on the ground that there was not sufficient competitive pressure, and that the unavailability of slots at peak times at Vienna and Brussels airports made market entry difficult (recitals 257 and 261 to the contested decision).

243    However, it should be observed that, as is apparent from recital 330 to the contested decision, the parties to the concentration undertook to make available to a new air service supplier slots enabling up to four frequencies per day, but not more than 24 frequencies per week, on the Vienna-Brussels route. It should also be observed that the Commission stated, in recital 356 to the contested decision, that, concerning all identified city pairs, the market investigation had largely confirmed that the number of slots offered in the commitments was sufficient for one or more players wishing to offer new or additional frequencies to be able to compete effectively with the parties. It must be stated that the applicant does not dispute the results of the market investigation on that point.

244    Accordingly, the applicant has failed to demonstrate that the concentration would have the consequence of creating a barrier to entry to the Vienna-Brussels route.

245    The present complaint must therefore be rejected as unfounded.

 Fourth complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the barrier to market entry constituted by the predatory pricing policy pursued by Lufthansa and Austrian

246    The applicant claims, in essence, that Lufthansa and Austrian operate an unfair pricing policy which prevents competitors from entering or remaining on the market. According to the applicant, the parties to the concentration have always distinguished the prices of their flights according to the competitive situation on the routes which they serve. They thus apply low, indeed very low, prices on the routes on which they face competition and high prices on routes on which they have a monopoly or a quasi-monopoly. That enables them to exclude their competitors with the help of predatory pricing. That policy is demonstrated by the very low tariffs charged by Lufthansa and Austrian on the Vienna-Berlin, Vienna-Innsbruck, Vienna-Zurich, Vienna-Munich, Vienna-Hamburg, Vienna-Frankfurt-am-Main routes or the Vienna-Düsseldorf route, on which they face or faced competition by air carriers which were eventually excluded, such as Sky Europe on the Vienna-Innsbruck route, or whose entry to the market was made difficult, such as Air Alps on the same route. According to the applicant, that policy was even accentuated recently as a result of the State aid of EUR 500 000 000 which enabled Austrian to offer particularly keen tariffs on a large number of routes and in particular on those which the applicant only recently began to serve.

247    In that regard, it should be observed, first of all, that the pricing policy recently applied by the merged entity to which the applicant refers in paragraph 132 of the application and also in Annex A26 to the application relates to facts subsequent to the adoption of the contested decision, which, in accordance with the settled case-law of the General Court, have no effect on the legality of that decision.

248    Next, it should be observed that the unfair pricing policy allegedly conducted by Lufthansa and Austrian before the adoption of the contested decision was possible, according to the applicant, only because of the monopoly which the parties enjoyed on certain routes. When examining the compatibility of a concentration with the common market, the Commission is required to assess the competitive effects of the concentration on the markets on which there is an overlap between the activities of the parties to a concentration. It follows that if one of the parties already enjoys a monopoly on an air route, that is to say, a relevant market, before the concentration, that monopoly by definition escapes the analysis of the competitive effects of the concentration.

249    On the other hand, that does not apply when the monopoly or dominant position on an air route results from or is strengthened by the concentration. In such a case, in the absence of commitments by the parties of such a kind as to remedy the effects on competition of the dominant position, the Commission cannot declare the concentration compatible with the common market. It should be borne in mind that the Commission identified competition concerns linked with the concentration on only five air routes, with respect to which commitments were given by the parties in the form of corrective measures.

250    Last, it should be observed that, although the fact that an airline uses its dominant position on certain air routes to practise a policy of exclusion from competition by prices on a different route may constitute an abuse of a dominant position prohibited by Article 102 TFEU, it is for that airline’s competitors to report that practice to the national competition authorities or the Commission, without prejudice to the possibility that the latter may act of their own initiative, in accordance with Article 5 and Article 7(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 TFEU] and [102 TFEU] (OJ 2003 L 1, p. 1). Only in the context of such a procedure will the authorities concerned be capable of assessing the reality of the conduct reported to them.

251    This complaint must therefore be rejected as unfounded.

 Fifth complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the fact that the merged entity will have a monopoly on air traffic rights from Central Europe to Eastern Europe, and also to the Middle East

252    The applicant maintains, in essence, that the merged entity will hold a monopoly over the air traffic rights from Central Europe to destinations in Eastern Europe and the Middle East, That situation, which arises in the case of Austria from the provisions of the Bundesgesetz über den zwischenstaatlichen Luftverkehr 2008 (Federal International Air Traffic Act 2008) of 2 July 2008 (BGBl. I No 96/2008, most recently amended by BGBl. I No 89/2009), creates a barrier to entry to routes from Central Europe to Eastern Europe and also to the Middle East.

253    In support of this complaint the applicant requested, in its observations on the statements in intervention, in order to prove the claims put forward in paragraphs 45 and 46 of those observations, as regards the conduct of the Republic of Austria in the renegotiation of the agreement on air services with the Russian Federation, the personal appearance of its managing director, Mr Otmar Lenz. The applicant also requested that a number of officials of the Bundesministerium für europäische und internationale Angelegenheiten (Federal Ministry of European and International Affairs), and also an official of the Bundesministerium für Verkehr, Innovation und Technologie (Federal Ministry of Transport, Innovation and Technology), be examined as witnesses, on the ground that they took part in the renegotiation of the agreement on air services with the Russian Federation.

254    It is appropriate to examine those requests first of all.

255    In support of its requests for witnesses to be called and for its managing director to appear in person, the applicant claims that, in accordance with Article 48(2) of the Rules of Procedure, new pleas in law and therefore the corresponding evidence are admissible even after the reply and the rejoinder, provided that they are based on matters of law or of fact which have come to light in the course of the procedure. The arguments put forward in the observations on the statements in intervention and the corresponding offers of evidence are intended to challenge the allegations made by the Republic of Austria in its statement in intervention and, in the applicant’s submission, are therefore admissible.

256    The Commission and the interveners contend that the applicant’s requests are offers of proof which are inadmissible on the ground that they are out of time. They further maintain that the request for the examination of witnesses is inadmissible owing to the lack of precision in the request as to the facts that must be proved. The request for the appearance in person of the applicant’s managing director is also inadmissible, on the ground that it is not capable of providing evidence to support the arguments put forward by the applicant in its observations on the statements in intervention.

257    In that regard, it should be observed that, as is apparent on reading Article 44(1)(e) together with Article 48(1) of the Rules of Procedure, an applicant is required to submit its evidence in the application and may offer further evidence in the reply, provided that it gives reasons for the delay in offering it.

258    In the present case, it is apparent from paragraph 60 of the observations on the statements in intervention of the Republic of Austria and of Lufthansa that the applicant’s requests seek expressly to adduce evidence in support of arguments put forward by the applicant itself. It follows that those requests are indeed offers of evidence within the meaning of the abovementioned provisions.

259    As regards the alleged delay in making those requests, it must be stated that those requests were not formulated either in the application or in the reply, but in the applicant’s observations on the statements in intervention of the Republic of Austria and of Lufthansa. However, it does not follow that those requests must necessarily be regarded as being out of time. Provided that the arguments in support of which they are made do not constitute new pleas or complaints directed against the Commission’s decision, but respond to arguments specific to the interveners, the offers of evidence made in the observations on the statements in intervention cannot be regarded as being out of time. In this case, the applicant maintains that its requests are specifically intended to adduce evidence in support of the assertions made in its observations on the statements in intervention in response to the arguments put forward by the interveners.

260    In that regard, in the case, first, of the request that the applicant’s managing director should appear in person of, it should be observed that, according to the applicant, the purpose of the request is to adduce evidence in support of the arguments put forward in paragraphs 45 to 56 of its observations on the statements in intervention. It should be pointed out that the arguments in those paragraphs seek in fact to respond to the arguments of the Republic of Austria concerning the renegotiation of the bilateral agreements on air services, in particular with the Russian Federation. It follows that the offer of evidence consisting in the appearance in person of the applicant’s managing director cannot be regarded as out of time in that it is intended to adduce evidence in support of that argument.

261    As regards, second, the request for witnesses to be called, it should be observed that it also seeks to adduce evidence in support of the arguments put forward by the applicant in paragraphs 45 and 46 of its observations on the statements in intervention. It cannot therefore be regarded as out of time, in so far as, as stated above, those arguments were put forward by the applicant in response to the specific arguments of the Republic of Austria concerning the renegotiation of the bilateral agreement on air services with the Russian Federation.

262    However, it should also be borne in mind that, in the words of the third subparagraph of Article 68(1) of the Rules of Procedure, ‘[a]n application by a party for the examination of a witness shall state precisely about what facts and for what reasons the witness should be examined’.

263    In this instance, the Court considers that the facts to be proved are described with sufficient precision in paragraphs 45 and 46 of the observations on the statements in intervention to which the applicant refers. Thus, it is stated in paragraph 46 that ‘[i]n the course of the current negotiations, since the adoption of the contested decision, with the Russian Federation on the existing agreement on air services …, the Republic of Austria has not made the slightest attempt to secure an amendment of the nationality clause in the agreement in question’ and that ‘in the course of those negotiations, the sole concern of the delegation of the Republic of Austria has been to demonstrate that Austrian — even after being taken over by Lufthansa — is an Austrian airline (essentially owned or controlled by Austrian nationals) in order thereby to ensure that the traffic rights conferred on Austrian are maintained’. It is further stated that ‘[t]he Republic of Austria even went so far as to have a report drawn up by the Federal Ministry of European and International Affairs showing that Austrian is an Austrian airline (essentially owned or controlled by Austrian nationals) and that it therefore satisfies the requirements of the nationality clause in the bilateral agreement on air services with the Russian Federation’.

264    However, the applicant does not state the reasons why it wishes the Court to examine the persons whom it identifies by name in its request. In fact, the applicant merely indicates the names of those persons and the ministry for whom they work and the address of that ministry. It wholly fails to explain why those persons in particular would be able to prove the facts which it puts forward in paragraph 46 of its observations on the statements in intervention.

265    It follows that the applicant’s request for the examination of witnesses in order to adduce evidence of the assertions set out in paragraphs 45 and 46 of its observations on the statements in intervention does not meet the requirements of the third subparagraph of Article 68(1) of the Rules of Procedure and must therefore be rejected as inadmissible.

266    Furthermore, it should be observed that the applicant stated in paragraph 46 of its observations on the statements in intervention that its managing director had taken part in the negotiations held since the adoption of the contested decision between the Republic of Austria and the Russian Federation concerning the bilateral agreement on air services between those two States.

267    However, under Article 65(a) and the first subparagraph of Article 66(1) of the Rules of Procedure, the applicant’s managing director could appear before the Court only as a party to the dispute, and not as a witness. It follows that his statements would have no additional probative value by comparison with the applicant’s allegations.

268    Furthermore, it must be stated that the facts put forward by the applicant in paragraph 46 of its observations on the statements in intervention postdate the adoption of the contested decision and are therefore in any event not capable of calling into question the legality of that decision.

269    In those circumstances, the Court did not consider it appropriate to invite the applicant’s managing director to appear in person at the hearing.

270    In order to answer the applicant’s complaint, it is necessary to recall in brief what air traffic rights are. Thus, in order to serve a route between airports in two different States, an airline must have an international air traffic right, that is to say, authorisation to serve that route. Each State designates the airlines established on its territory which it authorises to serve a route between that territory and the territory of another State. The number of authorisations that can be granted by each State to service an international air route is traditionally determined by a bilateral international agreement between the two States concerned. Those traffic rights therefore constitute, a priori, a legal barrier to entry to an international air route.

271    Those legal barriers were lifted within the European Union by Council Regulation (EEC) No 2408/92 of 23 July 1992 on access of Community air carriers to intra-Community air routes (OJ 1993 L 240, p. 8), which has since been repealed by Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (Recast) (OJ 2008 L 293, p. 3).

272    In accordance with Article 15 of Regulation No 1008/2008, air carriers in possession of a valid operating licence issued by the competent authority of the Member State in which they have their principal establishment are to be entitled to operate intra-Community air services and Member States are not to subject the operating of those services by such a carrier to any permit or authorisation.

273    On the other hand, traffic rights are still necessary in order to serve an air route between the territory of a Member State of the European Union and the territory of a third State. Owing to the uncertainty created by Article 84(2) EEC, which became Article 80(2) EC and then Article 100(2) TFEU, as to the existence of an external competence of the Community and then of the Union in the sphere of air transport, Member States have continued to regulate the award of air traffic rights for routes between their respective territories and the territory of third States on the basis of bilateral international agreements.

274    In the judgments of 5 November 2002 in Commission v United Kingdom (C‑466/98, ECR, EU:C:2002:624), Commission v Denmark (C‑467/98, ECR, EU:C:2002:625), Commission v Sweden (C‑468/98, ECR, EU:C:2002:626), Commission v Finland (C‑469/98, ECR, EU:C:2002:627), Commission v Belgium (C‑471/98, ECR, EU:C:2002:628), Commission v Luxembourg (C‑472/98, ECR, EU:C:2002:629), Commission v Austria (C‑475/98, ECR, EU:C:2002:630) and Commission v Germany (C‑476/98, ECR, EU:C:2002:631) (‘the Open Skies judgments’), the Court of Justice held that the European Union had acquired exclusive external competence through the use of its internal competence in certain spheres of air transport, namely the allocation of slots in airports, computerised reservations systems and intra-Community pricing. The Court of Justice therefore made a finding of failure to fulfil obligations against the Member States which had entered into bilateral agreements with the United States with the object of regulating those spheres.

275    In the Open Skies judgments, the Court also found that certain Member States had failed to fulfil their obligations by entering into bilateral agreements with the United States which granted the United States the right to revoke, suspend or limit air traffic rights where the air carriers designated by the Member State in question were not owned by that Member State or by nationals of that Member State, under ‘national ownership and control’ clauses, owing to the discrimination to which such clauses gave rise vis-à-vis Community airlines not owned or controlled by the Member State or nationals of the Member State on whose territory they wish to become established, which constitutes an infringement of Article 52 EC.

276    The Member States are therefore required to renegotiate all bilateral agreements relating to air transport containing a ‘national ownership and control’ clause which they have entered into with third States, in order to put an end to the infringements found by the Court of Justice in the open skies judgments in the case of those against which proceedings were taken on that occasion, including the Republic of Austria, and to avoid such proceedings in the case of the other Member States.

277    In that context, the European Parliament and the Council adopted Regulation No 847/2004 of 29 April 2004 on the negotiation and implementation of air service agreements between Member States and third countries (OJ 2004 L 157, p. 7). It follows from recital 6 in the preamble to that regulation that all bilateral agreements between Member States and third countries that contain provisions contrary to EU law should be amended or replaced by new agreements that are wholly compatible with EU law.

278    Article 5 of Regulation No 847/2004, on the distribution of traffic rights, provides that ‘[w]here a Member State concludes an agreement, or amendments to an agreement or its Annexes, that provide for limitations on the use of traffic rights or the number of Community air carriers eligible to be designated to take advantage of traffic rights, that Member State shall ensure a distribution of traffic rights among eligible Community air carriers on the basis of a non-discriminatory and transparent procedure’.

279    Since the open skies judgments and the adoption of Regulation No 847/2008, EU air carriers can therefore, in principle, compete with the air carriers of a Member State to obtain international traffic rights in a non-discriminatory and transparent procedure.

280    However, that assumes that the bilateral agreement laying down the conditions for the distribution of traffic rights contains a ‘community ownership and control’ clause, which is manifestly not yet the case of the agreement between the Republic of Austria and the Russian Federation.

281    Consequently, only air carriers controlled or owned by the Austrian State or by Austrian nationals are able to obtain traffic rights to fly directly from Austrian territory to Russian territory. It should be observed, moreover, that, as is apparent from the statement in intervention of the Republic of Austria, the latter has distributed traffic rights between Austria and Russia only to Austrian and the applicant, which are both Austrian airlines.

282    Thus, non-Austrian Community carriers cannot enter the routes between Austria and Russia in such a way as to compete with Austrian’s offer. Owing to the fact that the ‘national ownership and control’ clause remains in the agreement between the Republic of Austria and the Russian Federation, they cannot obtain a traffic right in such a way as to offer direct flights on those routes. In addition, as stated above, the indirect flights which they might offer on those routes, using their hub in a Member States which has granted them traffic rights to Russia, would not exercise sufficient competitive pressure on short-haul routes such as Vienna-Moscow.

283    However, it should be observed that the applicant itself has been granted air traffic rights on the Vienna-Moscow route, which enables it to compete with Austrian. Furthermore, it should be noted that Russian airlines are also eligible to obtain traffic rights from the competent authorities of the Russian Federation that would enable them to enter the market and compete with Austrian by offering direct flights on routes between Austria and Russia. Above all, however, the concentration itself has no effect on the distribution of existing traffic rights. Thus, even if, following the merger, Lufthansa were to hold traffic rights enabling it to offer direct flights from Germany, Austria or Switzerland to Eastern European countries — which remains to be shown, since the applicant has specifically mentioned only traffic rights granted by the Republic of Austria –, that would not in itself have the effect of preventing other competitors from entering those routes. The reason why those competitors could not enter those routes is that they do not have traffic rights, which has nothing to do with whether or not the concentration takes place.

284    Accordingly, the complaint alleging that the merged entity would enjoy a monopoly of air traffic rights, creating a barrier to entry to routes between Central Europe and Eastern Europe, must be rejected as unfounded.

285    The fourth part of the first plea must therefore be rejected as unfounded.

 Fifth part of the first plea, alleging a manifest error of assessment as to the ability of the commitments to provide a remedy for the competition concerns created by the concentration

286    In the context of the fifth part of the first plea, the applicant claims, in essence, that the commitments proposed by the parties to the concentration did not enable the competition concerns created by the concentration at issue to be remedied.

287    As a preliminary point, the offer of evidence, in the form of a request for the appearance in person of its managing director, presented for the first time by the applicant in its observations on the statements in intervention, in order to support the arguments set out in paragraphs 47 to 56 of those observations, must be rejected as inadmissible, as they were submitted out of time. It must be stated that those arguments in part restate and in part expand on the arguments already put forward in the application and in the reply concerning the alleged insufficiency of the commitments given by the parties to the concentration.

288    It is appropriate, next, to bear in mind the context of the analysis applicable by the Commission to the commitments and the extent to which the Courts of the European Union may review that analysis.

289    The purpose of the control of concentrations is to provide to the undertakings concerned the authorisation which is necessary and preliminary to the implementation of any concentration having a Community dimension. As part of the arrangements for control, those undertakings may submit commitments to the Commission in order to obtain a decision finding their concentration to be compatible with the common market (judgment in Ryanair v Commission, paragraph 85 above, EU:T:2010:280, paragraph 448).

290    Depending on the stage which the administrative procedure has reached, the commitments proposed must allow the Commission either to form the view that the notified concentration does not raise serious doubts as to its compatibility with the common market at the stage of the preliminary examination (Article 6(2) of the Merger Regulation) or to respond to the objections sustained during the detailed investigation (Article 18(3), read together with Article 8(2) of the Merger Regulation). Those commitments therefore make it possible to avoid the initiation of a detailed investigation phase or a subsequent decision declaring that the concentration is incompatible with the common market (judgment in Ryanair v Commission, cited in paragraph 85 above, EU:T:2010:280, paragraph 449).

291    Article 8(2) of the merger regulation allows the Commission to attach to a decision declaring a concentration compatible with the common market in accordance with the criterion laid down in Article 2(2) of the regulation conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered into vis-à-vis the Commission with a view to rendering the concentration compatible with the common market (judgment in Ryanair v Commission, cited in paragraph 85 above, EU:T:2010:280, paragraph 450).

292    Having regard both to the significance of the financial interests and industrial or commercial stakes inherent in that type of transaction and to the powers available to the Commission in the field, it is in the interest of the undertakings concerned to facilitate the work of the administration. For the same reasons, the Commission must display the utmost diligence in performing its supervisory duties in the field of concentrations (judgment in Ryanair v Commission, cited in paragraph 85 above, EU:T:2010:280, cited in paragraph 451).

293    It must also be noted that, in the context of merger control, the Commission has power to accept only such commitments as are capable of rendering the notified transaction compatible with the common market (judgment in Ryanair v Commission, cited in paragraph 85 above, EU:T:2010:280, cited in paragraph 452).

294    It must be held in that regard that commitments proposed by one of the parties to a merger will meet that condition only in so far as the Commission is able to conclude, with certainty, that it will be possible to implement them and that the remedies resulting from them will be sufficiently workable and lasting to ensure that the creation or strengthening of a dominant position, or the impairment of effective competition, which the commitments are intended to prevent, will not be likely to materialise in the relatively near future (judgment in Ryanair v Commission, cited in paragraph 85 above, EU:T:2010:280, paragraph 453).

295    As regards the review carried out by the Courts of the European Union over the commitments accepted by the Commission in the context of the control of concentrations, it should be borne in mind that, according to settled case-law, the Commission enjoys a broad discretion in assessing the need for commitments to be given in order to dispel the serious doubts raised by a concentration. It follows that it is not for the Court to substitute its own assessment for that of the Commission: the Court’s review must be limited to assessing that the Commission has not made a manifest error of assessment. In particular, the alleged failure to take into consideration the commitments suggested by the applicant does not by itself prove that the contested decision is vitiated by a manifest error of assessment. Moreover, the fact that other commitments might also have been accepted, or might even have been more favourable to competition, cannot justify annulment of that decision in so far as the Commission was reasonably entitled to conclude that the commitments set out in the decision served to dispel the serious doubts (judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 128).

296    In exercising its power of review, the Court must take into account the specific purpose of the commitments, depending on whether they were given during phase I or phase II of the procedure of the examination of the concentration.

297    Thus, the commitments entered into in phase I are intended to dispel any serious doubts as to whether the concentration would significantly impede effective competition in the common market or a significant part of it, in particular by creating or strengthening a dominant position. Consequently, when the Court is called on to consider whether, having regard to their scope and content, the commitments entered into during the phase I procedure are such as to permit the Commission to adopt a decision of approval without initiating the phase II procedure, it must examine whether the Commission was entitled, without making a manifest error of assessment, to take the view that those commitments constituted a direct and sufficient response capable of clearly dispelling all serious doubts (see, to that effect, concerning the former Merger Regulation, Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1), judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 129).

298    On the other hand, the commitments entered into during the phase II procedure are intended, in particular, to remedy the competition concerns found by the Commission during phase I that led the Commission to initiate the phase II procedure. Consequently, when the Court is called upon to consider whether, having regard to their scope and content, the commitments given during phase II are such as to permit the Commission to adopt a decision approving the concentration, it must examine whether the Commission was entitled, without making a manifest error of assessment, to take the view that those commitments constituted a direct and sufficient response to the competition concerns found during phase I.

299    It is in the light of those principles that the arguments put forward by the applicant should be assessed.

300    The applicant claims that the commitments at issue were an appropriate means of remedying the competition concerns found by the Commission on certain routes in the contested decision.

301    However, it should be noted that the applicant also takes issue with the Commission for having approved the concentration in the absence of compensatory measures such as to counterbalance the competition concerns on all destinations, both short haul and medium haul, served by Austrian on routes between Central European and Eastern Europe, and also on routes between Austria and Germany. The applicant also complains of the absence of commitments of such a kind as to remedy the competition concerns created by the concentration with respect to the capacities of the merged entity and the pricing policy of Lufthansa and Austrian.

302    In that regard, it should be borne in mind that, as already stated when the first four parts of the present plea were being examined, the Commission had not made a manifest error of assessment by not referring to the existence of competition concerns other than those found in the contested decision. Accordingly, the Commission cannot be accused of having made a manifest error of assessment by accepting commitments which were not such as to remedy the competition concerns alleged by the applicant which were not found in the contested decision.

303    As regards, moreover, the applicant’s argument that the monopoly over the air traffic rights which the merged entity will enjoy on routes between Austrian and the countries of Eastern Europe and the Middle East, the Commission ought to have required the Austrian authorities to undertake to distribute air traffic rights to Lufthansa’s competitors wishing to begin to serve those routes, it should be borne in mind that, in accordance with the second subparagraph of Article 8(2) of the Merger Regulation, the Commission may attach to the decision declaring the concentration compatible with the common market conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered into vis-à-vis the Commission with a view to rendering the concentration compatible with the common market. It follows that, in such a situation, the decision declaring the concentration compatible with the common market is conditional on the parties complying with the obligations represented by the commitments which they have given to the Commission. The Commission cannot therefore make the adoption of a decision declaring a concentration between two airlines compatible with the common market conditional on a Member State undertaking to grant air traffic rights to the competitors of those airlines, pursuant to the second subparagraph of Article 8(2) of the Merger Regulation.

304    In those circumstances, the Court will confine itself to assessing the applicant’s complaint alleging that the commitments given by the notifying parties are inappropriate for remedying the competition concerns identified by the Commission in the contested decision.

 The appropriateness of the commitments in respect of slots on the routes identified between Austria and Germany

–       The slots to be made available on the Vienna-Frankfurt-am-Main route

305    The applicant maintains, in essence, that the deduction of the slots previously transferred to it by Lufthansa from the number of slots to be made available by Lufthansa on that route will have the consequence that Lufthansa’s commitment will be limited to making two additional slots available, which, in the applicant’s submission, is not sufficient to enable a new entrant to ensure sufficient competitive pressure.

306    As regards, first, the applicant’s argument that the deduction of the slots previously transferred to it by Lufthansa from the number of slots to be made available on the route in question is not justified, it should be observed that, at the time of the adoption of the contested decision, Lufthansa and Austrian each held five daily slots on the Vienna-Frankfurt-am-Main route, whereas Adria Airways, a member of Star Alliance, held three and the applicant held two and had received a third from the IATA winter season 2009/2010 (recitals 154 and 162 to the contested decision).

307    As the Commission indicates in recitals 159 to 162 to the contested decision, the distribution of slots on the route in question is connected with the existence of the joint venture agreement between Lufthansa and Austrian, under which they undertook to share all revenues and all operating expenses on that route. That joint venture agreement was temporarily exempted by the Commission under Article 81(3) EC in return for certain commitments. When the Commission’s exemption decision expired in 2005, the parties continued their cooperation in a joint venture on the basis of a self-assessment of the compliance of that cooperation with Article 81 EC. The Commission stated that that self-assessment had led the parties to find that there were ‘serious concerns’ regarding the compatibility of the joint venture agreement with Article 81 EC and to conclude that it was very likely that slots would need to be transferred to their competitors. It follows from recital 162 to the contested decision that it was on the basis of that self-assessment that Lufthansa transferred two slots at Frankfurt-am-Main airport to the applicant in 2006, so as to enable it to enter that route with two daily frequencies. It was in that context that Lufthansa transferred a further slot to the applicant in July 2009, as a result of which it was able to operate a third daily frequency on that route from the IATA winter season 2009/2010.

308    The Commission indicated in the contested decision that that situation should be compared, as a counterfactual scenario, with the hypothesis of the concentration in which the joint venture would have come to an end owing to the creation of a structural link between Lufthansa and Austrian, which, in accordance with the provisions of the joint venture agreement, would have resulted in the applicant returning the slots to Lufthansa. According to the Commission, in the light of the congestion at Frankfurt-am-Main airport, it would have been virtually impossible for the applicant to obtain its own slots and it would therefore have had to cease to operate the Vienna-Frankfurt-am-Main route. Adria Airways would have remained the only competitor of the merged entity on that route and, according to the Commission, would have been unable to exert sufficient competitive pressure (recitals 162 to 168 to the contested decision).

309    In order to remedy that competition concern, the parties gave a commitment to make slots available that would enable a new provider of air services to operate up to five frequencies per day on that route (recital 330 to the contested decision).

310    In that regard, it is stated in recital 331 to the contested decision that the number of slots to be made available will be reduced by the number of slots already transferred to a new entrant under the commitments, unless those slots cease to be used by the new entrant and therefore revert to the parties.

311    In the particular case of the Vienna-Frankfurt-am-Main route, it is provided that the three frequencies operated by the applicant on that route will be deducted from the number of slots to be made available under the commitments (recital 333 to the contested decision). It follows that the applicant will retain the slots previously transferred by Lufthansa and that two additional slots will have to be made available by Lufthansa.

312    In fact, the retention of the three slots previously transferred to the applicant by Lufthansa and their deduction from the five slots to be made available on that route are justified in the contested decision by the fact that the transfer of those slots to the applicant corresponds to a counterfactual scenario described by the Commission in the contested decision, in which that transfer together with the presence of Adria Airways ensured that there was sufficient competitive pressure on the Vienna-Frankfurt-am-Main route. In that regard, it must be stated that the applicant does not dispute the counterfactual scenario established by the Commission in the context of the analysis of the competitive effects of the concentration on the Vienna-Frankfurt-am-Main route.

313    As regards, second, the applicant’s argument that the commitment to make three additional slots available on the Vienna-Frankfurt-am-Main route is limited to making only two slots available, it should be observed that, as stated above, the commitments given by the parties to the concentration actually had the effect not only of allowing the applicant to retain three slots which it would otherwise have had to surrender to Lufthansa and of making two additional slots available. Those two additional slots can be requested by the applicant or by any new entrant.

314    It follows from recital 334 to the contested decision, moreover, that the applicant will be authorised to exchange the slots which it has received from Lufthansa at Frankfurt-am-Main, in accordance with the slot lease agreement between it and Lufthansa, for slots which Lufthansa makes available under the commitments.

315    It also follows from recital 335 to the contested decision that, irrespective of whether the applicant chooses to obtain new slots from the parties in exchange for its current slots at Frankfurt-am-Main airport, Lufthansa undertakes to amend its existing slot lease agreement with the applicant to reflect the provisions of the commitments, in particular as regards the possibility for the applicant to obtain grandfathering rights with respect to those slots, in accordance with recital 342 to the contested decision.

316    It follows from that recital that the new entrant will obtain grandfathering rights on the slots obtained from the parties, that is to say, that it will be entitled to use the slots transferred by the parties at both ends of the route pertaining to any identified city pair for a different intra-European city pair once it has served the relevant identified city pair during two consecutive IATA seasons, with the exception of the identified city pair Vienna-Frankfurt-am-Main, as it will be necessary to have served that route for eight consecutive IATA seasons in order to acquire grandfathering rights.

317    Accordingly, it must be held that, in accordance with the commitments given by the parties to the concentration, the applicant will not only be able to keep the three slots previously transferred to it and possibly to obtain two additional slots, but will also be able to obtain grandfathering rights in the slots transferred to it by Lufthansa under the lease agreement at Frankfurt-am-Main airport after eight consecutive IATA seasons and to exchange those slots with other slots made available by Lufthansa under the commitments.

318    As regards, third, the applicant’s argument that the fact that additional slots would be made available as envisaged in the commitments would not be such as to enable a new competitor to enter the Vienna-Frankfurt-am-Main route, it must be stated that that argument is contradicted by the results of the market investigation to which the Commission refers in the contested decision. The Commission thus stated, in recital 362 to the contested decision, that a majority of participants in the market investigation took the overall view that the commitments would enable the applicant or a new entrant to provide competitive and viable air services on the Vienna-Frankfurt-am-Main route. It is also stated that the participants in the market investigation widely agree that the commitments overall sufficiently facilitate and increase the likelihood of entry to or expansion on the route by a competitor and thus solve the competition concerns on that route.

319    As regards, fourth, the applicant’s argument that the Commission must carry out its own assessment of the commitments and not rely in that respect on the findings of the market investigation, it should be stated that this argument was raised for the first time in the applicant’s reply. However, it should be observed that its purpose is to respond to an argument put forward by the Commission in its defence and that it cannot therefore be considered to be out of time. However, it cannot succeed, in so far as it is clear from actual words of recital 362 to the contested decision that the market investigation was used by the Commission only to confirm its own findings as to the appropriateness of the commitments on the route in question.

320    As regards, fifth, the arguments put forward by the applicant concerning the ability of the airline MAP to serve the Vienna-Frankfurt-am-Main route, it must be stated that, on the assumption that they were well founded, they concern only the position of one participant in the market investigation and cannot therefore in themselves call into question the findings of that investigation as a whole.

321    Furthermore, it should be observed that, contrary to the applicant’s contention, it does not follow from Annex C8 to the reply that the airline MAP has only two 170-seat type MD-83 aircraft made available to other airlines under leasing agreements, but that it has, in addition to its 13 business aircraft, two 170-seat type MD-83 aircraft for additional demand. As the Commission claims, the fact that those type MD-83 aircraft were leased to other airlines does not preclude their being used by the airline MAP in future on its own behalf. It must therefore be held that that argument is factually inaccurate.

322    In the light of the foregoing considerations, the complaint alleging that the fact that slots are made available on the Vienna-Frankfurt-am-Main route is insufficient must be rejected as unfounded.

–       The slots made available on the Vienna-Munich route

323    The applicant maintains, in essence, that the fact that only a single slot is made available on the Vienna-Munich route, because the number of slots which it currently operates on that route is deducted from the number of slots which the parties to the concentration undertake to make available, will not enable an air carrier to enter that route on a competitive basis.

324    In that regard, it should be observed that the applicant appears to proceed on the assumption that it would decide to maintain its current level of slots. However, it should be stated that, while it is true that in such a case only a single slot would be available for a new entrant, the Commission stated in recital 363 to the contested decision:

‘… While the provision of competitive air services in particular for time-sensitive passengers generally requires more than one daily frequency, it should be noted … that [Munich] airport expects significant capacity extensions to be in place in the near future. In particular, a third runway is currently in the second phase of an extensive approval process and is expected to be operational as of 2011. This third runway will increase coordination of up to 120 movements per hour compared to 90 movements per hour with the existing two-runway system and will be available to both terminals at [Munich] airport. These planned capacity extensions increase the likelihood that new entrants would in the near future (in particular once the economic climate for air transport services referred to below in [recital] 384 et seq. has improved) be able to obtain slots under the normal slot allocation procedure … At the same time, they can obtain one slot under the commitments in relation to which they can have grandfathering rights after two seasons and which will therefore further incentivise them to enter the route.’

325    The Commission also stated, in recital 364 to the contested decision, that those elements taken together justified a deduction of the applicant’s existing frequencies from the slots to be made available under the commitments and would therefore allow the applicant and a new entrant to adequately reproduce the constraining effect that Lufthansa and Austrian would exercise upon each other in the absence of the transaction.

326    It should be observed that the applicant does not state how the findings made by the Commission in recital 363 to the contested decision are incorrect or do not permit the conclusion that the commitments allow a new entrant to enter the Vienna-Munich route successfully.

327    It should likewise be observed that the applicant does not dispute the findings of the market investigation to which the Commission refers in recital 365 to the contested decision, according to which the participants in the market investigation widely agree that the commitments solve the competition concerns on the Vienna-Munich route and that a majority of those participants take the view that the commitments overall sufficiently facilitate and increase the likelihood of entry or expansion and thus enable the applicant or a new entrant to provide a competitive and viable air service on that route. In reality, the applicant merely claims that the Commission itself must assess the sufficiency of those commitments and not rely on the results of the market investigation. However, it is clear from the actual words of recital 365 to the contested decision that the Commission did not rely solely on the market investigation in order to assess the sufficiency of the commitments, but that it merely stated that the conclusions which it had reached were ‘… in line with the overall assessment of the remedies for this route in the market test’.

328    In those circumstances, and in the absence of more specific arguments in support of this complaint, it must be held that it does not meet the requirements of precision which, according to the case-law, arise under Article 44(1)(c) and (d) of the Rules of Procedure and it must therefore be rejected as inadmissible (see, to that effect, judgment of 27 September 2012 in Nynäs Petroleum and Nynas Belgium v Commission, T‑347/06, ECR, EU:T:2012:480, paragraphs 107 and 108).

–       The slots made available on the Vienna-Cologne and Vienna-Stuttgart routes

329    The applicant claims, in essence, that the commitments would not be sufficient to enable a new competitor to enter the Vienna-Stuttgart and Vienna-Cologne routes, on the ground that they are served by the low-cost airline Germanwings.

330    In support of this complaint, the applicant puts forward a single argument, alleging that a low-cost airline can enter a route, creating a demand for cheap tickets, only to the extent to which another low-cost airline does not already serve that route.

331    In that regard, it should be observed that the applicant does not indicate how the principle which it puts forward, on the assumption that it is true in all circumstances and, in particular, in the present case, precludes a traditional airline, whose business model, supply of services and pricing structure are distinguished from those of low-cost airlines, from entering the routes in question.

332    It should also be observed that, if the assertion that the fact that one low-cost airline serves a route prevents any other low-cost airline from entering that route were correct, there would be no competition between low-cost airlines according to the O&D approach. However, it is apparent from recital 123 to the contested decision that, at the time of adoption of the contested decision, the airline TUIfly (which offers charter flights and low-cost flights) was to begin operations on the Vienna-Cologne route with two frequencies on weekdays and one frequency on Saturdays and Sundays and that those flights were available for booking for the IATA winter season 2009/2010, in spite of the fact that that route was already served by Germanwings.

333    The applicant has therefore not shown that the presence of Germanwings on those routes made entry by a new competitor impossible in spite of the commitments given by the parties to the concentration.

334    That finding is confirmed, moreover, according to the Commission, by the responses given by competitors to question 28 in the questionnaire sent to them during phase I of the market investigation, concerning whether the presence of a low-cost airline was a significant factor in the decision to operate a route and also how the presence of such an airline influenced the decision to commence, abandon or continue operating on a route.

335    As the responses to question 28 were not annexed to the Commission’s pleadings, the Court, by means of a measure of organisation of procedure adopted on 18 February 2013, requested it to produce them. The Commission complied with that request on 22 March 2013.

336    On reading the responses produced by the Commission it is apparent that, to the first part of the question, the vast majority of participants in the market investigation answered in the affirmative and that, to the second part of the question, the majority of the competitors questioned stated that that influenced their decision to enter or remain on the market, in that it made it less likely according, in particular, to the frequency of flights provided by the low-cost airline or the fact that it received public subsidies, and also their decision to exit from the market, in that the presence of a low-cost airline made it more likely. However, only a minority stated that the presence of a low-cost airline on a route was a reason not to enter that route or to leave it. Furthermore, a minority of competitors questioned stated that the presence of a low-cost airline on a route had not influenced their decision to serve the route in question, on the ground that they considered that it was a different market sector or that they themselves were low-cost airlines. In spite of the diversity of the responses to the second part of the question, it is clear that a majority of the competitors questioned do not rule out entering a route because of the presence of a low-cost airline on that route, although they recognise that it will make entry more difficult in certain circumstances.

337    In those circumstances, the Court considers that the Commission was correct to take the view that the presence of Germanwings on the Vienna-Cologne and Vienna-Stuttgart routes was not such as to impede the entry of new competitors on those routes.

 The fact that no airline has begun to operate on one of the routes covered by the commitments since the adoption of the contested decision

338    The applicant claims, in essence, that the insufficiency of the commitments given by the parties to the concentration is demonstrated by the fact that in the summer of 2010 no airline had begun to operate on one of the routes covered by the commitments.

339    In that regard, it should be borne in mind that, in accordance with a consistent line of decisions, even on the assumption that it were established, that circumstance, which post-dated the adoption of the contested decision, has no effect on the legality of the decision, in so far as that legality must be assessed on the basis of the facts as they stood at the time when the decision was adopted (see, to that effect, judgments of 7 February 1979 in France v Commission, 15/76 and 16/76, ECR, EU:C:1979:29, paragraph 7; 17 May 2001 in IECC v Commission, C‑449/98 P, ECR, EU:C:2001:275, paragraph 87; and 12 December 1996 in Altmann and Others v Commission, T‑177/94 and T‑377/94, ECR, EU:T:1996:193, paragraph 119).

340    It follows that that argument must be rejected as inoperative.

 The appropriateness of the other commitments

341    The applicant claims, in essence, that the interline agreements and prorate agreements and also participation in Lufthansa’s ‘Miles & More’ loyalty programme are not such as to guarantee sufficient competition.

342    In support of this complaint, the applicant maintains that the conclusion of interline and prorate agreements can be envisaged only for small airlines which essentially carry transfer passengers by way of regional traffic to the hubs of the network airlines and not genuine competitors of Lufthansa, namely Air Berlin, Air France-KLM, British Airways, easyJet or Ryanair.

343    That also applies to Lufthansa’s loyalty programme, as most of Lufthansa’s competitors have their own programmes and are therefore not interested in participating in Lufthansa’s programme. The only effective measure with respect to such a programme would be to prohibit its use on routes subject to competition in order to limit its customer loyalty effect.

344    In that regard, it should be observed that, under the commitments, it will be possible for a new entrant to conclude interline agreements with the parties to the concentration, which will enable it to sell to customers, on the identified city pair which it operates, return flights one leg of which is provided by the parties to the concentration and the other by the new entrant. That, as the Commission emphasises, will enable customers, for example, to leave in the morning with the competitor and, if the latter does not have a slot or does not provide a flight in the evening, to take a Lufthansa-Austrian flight for the return journey (point 4.2 of the commitments).

345    Furthermore, it should be observed that the commitments also provide for the possibility for a new entrant which asks the parties to the concentration to do so to conclude with them a special prorate agreement for traffic with a true origin and destination in either Austria or Germany or Austria and Belgium, provided that part of the journey involves the Vienna-Frankfurt-am-Main, Vienna-Munich, Vienna-Cologne, Vienna-Stuttgart or Vienna-Brussels routes. The conditions for that agreement must be such that the new air service provider receives the same treatment as Lufthansa’s Star Alliance partners on the same identified city pair (point 5.1 of the commitments).

346    The commitments at issue all concern the routes on which competition concerns were identified and are in addition to the availability of slots on those routes.

347    It appears, as the applicant claims, that those additional corrective measures may be of interest to the regional airlines serving Lufthansa’s and Austrian’s hubs from German or Austrian regional airports, for example from the aspect of a connecting flight via Vienna airport on routes between Austrian airports and Frankfurt-am-Main, Munich, Stuttgart, Cologne or Brussels airports, or, again, from the aspect of a connecting flight via Frankfurt-am-Main or Munich on routes between German regional airports and Vienna.

348    However, it is unclear why such corrective measures would not also be of interest to other competitors, whether low-cost airlines operating on the point-to-point model and wishing to be established on one of the routes identified or a network airline wishing to enter those routes in order to extend its offer while limiting the costs involved in such entry.

349    In that regard, it should be observed that the applicant does not put forward the slightest argument in support of its assertion that airlines such as easyJet, Ryanair, Air France-KLM or British Airways would not be interested in such corrective measures.

350    Nor does the applicant dispute the Commission’s assertion that the market investigation showed that, in the case of interlining agreements, the lack of such a solution was one of the reasons why third party carriers exited routes between Germany and Austria (contested decision, recital 377).

351    It is apparent from the responses to the questionnaire which the Commission sent to market players on 27 July 2009, produced by the Commission in response to the measure of organisation of procedure of 18 February 2013, that of the 48 market players that responded to questions 10 and 11 in that questionnaire, only six considered that the commitments proposed by the notifying parties did not constitute an incentive to enter or expand on routes between the identified city pairs. That finding confirms the Commission’s assertion in recital 377 to the contested decision and makes it possible to reject the applicant’s argument that the Commission made a manifest error of assessment in taking the view that those commitments were a suitable means of remedying the competition concerns raised by the concentration at issue.

352    In those circumstances, the applicant has not shown how the possibility of concluding interlining agreements and special prorate agreements as provided for in the commitments, taken with the availability of slots, would not enable competitors to have an incentive to enter the identified routes.

353    Nor is the applicant’s argument relating to the possibility of joining Lufthansa’s loyalty programme convincing. It should be borne in mind that, under the commitments, if a new entrant not participating in Lufthansa’s ‘Miles & More’ loyalty programme so requests, Lufthansa will allow it to join that programme for the identified city pairs operated by the new air service provider. The agreement must be such that the new air service provider will have the same treatment as Lufthansa’s Star Alliance partners. Financial conditions are to reflect the average conditions agreed upon with Lufthansa’s alliance partners (point 7.1 of the commitments). In fact, the Court has already held in the judgment in easyJet v Commission, cited in paragraph 139 above (EU:T:2006:187), that the fact that passengers on flights provided by competing airlines on the markets affected are able to obtain ‘miles’ from the merged entity confers a non-negligible advantage on those passengers and therefore, indirectly, on the competing airlines. If a competing airline does not wish to take part in the loyalty programme because of its own needs and organisation, for example because it has its own loyalty programme, that is the consequence of its own commercial decision. Accordingly, a strategic choice of that sort does not prove that such a corrective measure was inadequate or, consequently, that the Commission made a manifest error of assessment (judgment in easyJet v Commission, cited in paragraph 139 above, EU:T:2006:187, paragraph 143).

354    It follows that the complaint alleging that the other commitments are insufficient must also be rejected as unfounded.

3.     Third plea, alleging misuse of powers

355    The applicant merely claims that, when examining the concentration at issue, the Commission departed from its own Guidelines and communications, and in that regard the applicant merely refers to various paragraphs of its application.

356    In that regard, it should be borne in mind that, under Article 44(1)(c) and (d) of the Rules of Procedure, an application is to state a summary of the pleas in law on which the application is based. In addition, irrespective of any question of terminology, that summary must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without having to seek further information. It is necessary, for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, but coherently and intelligibly, in the application itself, in order to guarantee legal certainty and the sound administration of justice. In that regard, it is not the Court’s task to search through all the matters relied on in support of a first plea in order to ascertain whether those matters could also be used in support of a second plea (see, to that effect, judgment of 27 September 2006 in Roquette Frères v Commission, T‑322/01, ECR, EU:T:2006:267, paragraphs 208 and 209).

357    It must be stated that the applicant has put forward no specific argument in support of the present plea, but merely refers to the matters set out in other parts of its pleadings.

358    The third plea must therefore be rejected as inadmissible.

359    In the light of all of the foregoing considerations, the action must be dismissed in its entirety.

 Costs

360    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

361    As the applicant has been unsuccessful in its pleadings and the Commission, and also ÖIAG and Lufthansa, have applied for costs, the applicant must be ordered, in addition to bearing its own costs, to pay the costs incurred by the Commission, by ÖIAG and by Lufthansa.

362    The Republic of Austria must be ordered to bear its own costs, pursuant to the first subparagraph of Article 87(4) of the Rules of Procedure.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Niki Luftfahrt GmbH, in addition to bearing its own costs, to pay the costs incurred by the European Commission, by Österreichische Industrieholding AG and by Deutsche Lufthansa AG;

3.      Orders the Republic of Austria to bear its own costs.

Gratsias Kancheva Wetter

Delivered in open court in Luxembourg on 13 May 2015.

[Signatures]

Table of contents

Facts giving rise to the dispute

1.  The undertakings concerned

2.  Administrative procedure

3.  Content of the contested decision

Relevant markets

Assessment of the effects of the transaction on competition

Conceptual framework for the assessment of the concentration

Analysis of competition

Commitments

Commitments concerning slots

–  Slot release on city pairs raising competition concerns

–  Conditions pertaining to the slot transfer

–  Grandfathering rights

–  Star Alliance members as new entrants

Other commitments and provisions

–  Special prorate and code-share agreements

–  Other provisions

Analysis of the commitments

Conclusion

Procedure

Forms of order sought

Law

1.  Second plea, alleging breach of essential procedural requirements

First part of the second plea, alleging breach of the obligation to state reasons

Second part of the second plea, alleging insufficiency of the establishment of the facts in the context of the market investigation

2.  First plea, alleging infringement of Article 81(1) and (3) EC and Article 8 of the Merger Regulation and breach of the 2004 Guidelines

First part of the first plea, alleging a manifest error of assessment in the definition of the relevant geographic market

The definition of the market by the Commission according to the O&D approach

The failure to analyse the competitive effects of the concentration on the relevant geographic market defined according to a ‘global approach’

Second part of the first plea, alleging a manifest error of assessment as regards the competitive effects of the concentration on routes between Germany and Austria

Third part of the first plea, alleging a manifest error of assessment in relation to the consequences of the concentration on air routes between Central Europe and Eastern Europe outside the European Union

First complaint, alleging that the Commission did not analyse the effects of the concentration on air routes between Central Europe and Eastern Europe outside the European Union on the basis of the O&D approach

Second complaint, alleging that the Commission did not take account of the dominant position held by Lufthansa and Austrian on routes between, on the one hand, the airports in Vienna, Frankfurt-am-Main, Munich and Zurich and, on the other, the airports in Eastern Europe outside the European Union

Fourth part of the first plea, alleging a manifest error of assessment as to the ability of Lufthansa’s and Austrian’s competitors to remain on or to enter the relevant market

First complaint, alleging breach of paragraph 36 of the 2004 Guidelines in that the Commission did not take account of the fact that the concentration limited competitors’ ability to sell flights to business customers and to enter into framework agreements with travel agencies and tour operators

Second complaint, alleging breach of paragraph 31 of the 2004 Guidelines, in that the Commission did not take account of the fact that the merged entity will be the only network airline able to offer its customers a complete network of routes throughout the world, and in particular in Eastern Europe

Third complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the fact that the offer proposed by the merged entity will cover the entire demand available on the routes which the notifying parties dominate

Fourth complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the barrier to market entry constituted by the predatory pricing policy pursued by Lufthansa and Austrian

Fifth complaint, alleging breach of paragraph 68 et seq. of the 2004 Guidelines, in that the Commission did not take account of the fact that the merged entity will have a monopoly on air traffic rights from Central Europe to Eastern Europe, and also to the Middle East

Fifth part of the first plea, alleging a manifest error of assessment as to the ability of the commitments to provide a remedy for the competition concerns created by the concentration

The appropriateness of the commitments in respect of slots on the routes identified between Austria and Germany

–  The slots to be made available on the Vienna-Frankfurt-am-Main route

–  The slots made available on the Vienna-Munich route

–  The slots made available on the Vienna-Cologne and Vienna-Stuttgart routes

The fact that no airline has begun to operate on one of the routes covered by the commitments since the adoption of the contested decision

The appropriateness of the other commitments

3.  Third plea, alleging misuse of powers

Costs

* Language of the case: German.