Regional Airports as Two-Sided Markets – the Case for a More Economic Approach in the Application of the EU’s State Aid Rules

by Andreas Knorr and André W. Heinemann europese vlag

With its landmark ruling of December 17th, 2008, the European Union’s Court of First Instance (CFI) unexpectedly declared the European Commission’s famous Charleroi decision of early 2004 nil and void. On February 19th, 2009, the Commission decided not to appeal. The nullification of the Commission’s Charleroi decision by the CFI on purely formal grounds is just the culmination in a long-standing series of legal fights between traditional airlines and their low-cost competitors over (allegedly) unfair competition through (alleged) state aids. However, it has opened a rare window of opportunity for embarking on a much-needed, more economic approach in the EU’s state aids control procedures. In this paper, we will apply the theory of two-sided markets – so-called platforms – to this famous case as we deem it particularly fit to advance the economic analysis of the complex commercial relationships between airports and airlines.

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