After publishing its preliminary finding in February 2022[1], the German Federal Cartel Office (“FCO”) recently prohibited the Deutsche Lufthansa AG group (“Lufthansa”) from terminating longstanding cooperation agreements with Condor Flugdienst GmbH (“Condor”).[2] Under the cooperation agreements, Lufthansa is obliged to provide feeder flights to Condor’s long-haul passengers.
FCO Decision
The FCO fully confirmed its preliminary legal assessment. It found that the termination of the cooperation constituted an abuse of Lufthansa’s dominant position on the market for feeder flights. Lufthansa is the only airline that can offer a “comprehensive network of feeder flights from Europe to the major German hubs Frankfurt, Munich and Düsseldorf”. Condor would not be able to establish a comparable network in the foreseeable future because most of the airport slots at German hubs had been allocated to Lufthansa.[3]
The FCO concluded that sufficient service and price competition will be hindered if Condor is not allowed to use the upstream services, i.e., access to Lufthansa’s feeder flights, as Condor would no longer be able to serve customers who need a feeder flight. According to the FCO, these are up to 30% of all long-haul customers. The termination of the cooperation would mean a significant competitive advantages for Lufthansa which could gain a dominant position on almost 80 connecting flights to tourist destinations.
In addition, the FCO ordered Lufthansa to adjust several clauses in the cooperation agreement as the existing clauses were considered insufficient to ensure Condor’s access to feeder flights. From now on, Condor is entitled to a larger number of booking classes and may book seats at any time, provided they still have sufficient capacity. Finally, Lufthansa can no longer restrict the booking classes Condor can offer its long-haul passengers.
Conclusion and Legal Assessment
According to FCO President, Andreas Mundt, the decision will allow that “passengers from all over Europe can continue to use connecting tickets for feeder flights operated by Lufthansa and its airlines for Condor long-haul flights”.
The decision has not yet been published. However, it presumably falls into the category of the so-called “essential facilities doctrine”. According to this doctrine, access to the feeder flights operated by Lufthansa must be indispensable[4] for Condor to be competitively active on the downstream market for long-haul flights.
Lufthansa appealed the decision to the Düsseldorf Court of Appeals.
[1] For more information on the preliminary findings and background, please see our Antitrust Watch blog article available here.
[2] See the FCO’s Press Release of September 1, 2022, available in English here.
[4] See also regarding the criterion of indispensability in EU law, Oscar Bronner GmbH (Case C-7/97) EU:C:1998:569.