The European Commission has taken a decisive step in its ongoing investigation into a potential anti-competitive agreement between Lufthansa, United, and Air Canada.
The Commission has now issued a formal objection to Lufthansa. It has demanded that the airline reinstate access to its feed traffic for competitor Condor.
This action stems from concerns that the A++ transatlantic joint venture (JV) between the three airlines may be restricting competition on transatlantic routes. Of particular concern is the lucrative Frankfurt-New York route.
Feed Traffic and the Lufthansa-Condor Issue
The concept of ‘feed traffic’ is crucial to understanding the dispute between Lufthansa and Condor.
Condor’s Dependence on Lufthansa’s Network
Condor, a smaller airline, relied heavily on accessing Lufthansa’s extensive short-haul network. This meant that passengers traveling on shorter flights within Europe, operated by Lufthansa, could then connect to Condor’s long-haul flights, often departing from Lufthansa’s Frankfurt hub.
Special Agreements for Feed Traffic
This access was facilitated by special agreements between Lufthansa and Condor. These agreements are known as Special Prorate Agreements (SPAs).
They outlined the terms and conditions under which Condor could utilize Lufthansa’s network to feed its long-haul flights.

Lufthansa’s Termination of Agreements
The core issue in the dispute is that Lufthansa terminated these SPAs. By doing so, Lufthansa effectively cut off Condor’s access to a significant portion of its potential passenger base.
This action severely hampered Condor’s ability to compete effectively on routes like Frankfurt-New York, as it lost a crucial source of passengers for its long-haul flights.
Commission’s Concern
The European Commission is concerned that Lufthansa’s termination of the SPAs may be anti-competitive.
By denying Condor access to its network, Lufthansa could potentially drive Condor out of the market or significantly weaken its competitive position. This would reduce consumer choice and potentially lead to higher prices for air travel on the Frankfurt-New York route.

Original Joint Venture Approval in 2013
In 2013, the Commission approved the JV with specific conditions designed to mitigate potential anti-competitive effects. These conditions included provisions for competitors, such as Condor, to access slots and feed traffic at key airports.
Feed traffic, essentially passengers connecting to long-haul flights at a hub airport, is crucial for airlines to fill their aircraft and maintain profitable operations.
However, the Commission now suspects that the JV may not be adhering to these conditions and may be actively harming competition.
The termination of feed traffic agreements between Lufthansa and Condor is a key focus of the Commission’s investigation. By denying Condor access to its short-haul network, Lufthansa may be significantly hindering Condor’s ability to compete effectively on the Frankfurt-New York route.
This action, coupled with the existing concerns regarding the A++ JV’s potential anti-competitive effects, has prompted the Commission to intervene.
EU Directive to Lufthansa
To prevent further harm to competition and ensure the effectiveness of any future decisions regarding the A++ JV, the Commission has now ordered Lufthansa to reinstate the feed traffic arrangements for Condor.
This is an interim measure aimed at preserving the competitive landscape while the full investigation into the A++ JV continues.
Summary
The outcome of this investigation will have significant implications for the future of the A++ JV and the broader landscape of transatlantic air travel.
If the Commission finds that the JV has indeed violated competition rules, it could impose substantial fines on the participating airlines and potentially require them to make significant changes to their operations.
The case highlights the complexities of regulating international airline alliances in an era of increasing globalization and interconnectedness.
Balancing the potential benefits of such collaborations with the need to safeguard competition remains a crucial challenge for regulators worldwide.

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