Flying high

(Wikimedia Commons / David Herrmann)

Switching from climate change to the airline industry, from effect to cause, maybe, my eye was caught by a story in the Financial Times today about Ryanair. It is proposing to take over Aer Lingus, but such is the size of the deal that it needs regulatory approval from the competition authorities.

In former times, a deal on this scale would have needed clearance from the European Commission in Brussels. However, recent moves to decentralise decision-making see more decisions taken at national level, with a higher threshold before a takeover becomes of European interest. (So much for the criticism that Europe relentlessly centralises everything, by the way.)

Ryanair now are caught. In Irish terms, a merger between themselves and Aer Lingus might have considerable impact on consumer choice and competition; in European terms, it would have rather less. So Ryanair are desperate to have this deal seen as big enough to deserve European-level attention. The European Commission looks like the solution to a problem.

Of course, this is the same European Commission that was denounced by the same Ryanair as when it ruled against illegal subsidies received in connection with services from Charleroi airport. Michael O’Leary, Ryanair chief executive, dismissed it at the time as an “evil empire”. Perhaps he is rethinking that criticism now.

Such criticism of the Commission is doubly ironic because, of all the companies in Europe that have benefited from its activities, Ryanair is probably top of the list. It has grown as an international airline because the EU prohibits state regulation of routes and prices: this is a matter for competition these days. I can remember when national governments negotiated fares and schedules on behalf of national carriers: not any more.

Outside the EU, the old rules often still apply. There was a case recently when Alitalia objected that it was cheaper to fly from Rome to New York via London with British Airways than it was to fly direct on their own services. Because of the peculiar rules of international air transport, Alitalia had a case. This is what the single market has swept away. It is always astonishing that anyone should want those days back.

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