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Wet leasing is widely used in the airline industry, particularly in Europe. For many years the only approvals required for such an arrangement were in relation to safety compliance. The authors highlight an important new development by which merger control has been applied to certain wet leasing arrangements. There have been two instances where competition authorities have investigated wet lease agreements under merger control rules. The first was the European Commission and the German Federal Cartel Office in relation to Lufthansa/Air Berlin, and more recently the UK Competition and Markets Authority in relation to Aer Lingus/CityJet. In each case the question arose whether the broad commercial context of the wet lease meant that the lessee was somehow taking over the market position of the lessor.
Alec Burnside and Marjolein De Backer outline the reasoning of the authorities and explore the implications for wet leasing and competition law compliance moving forward.
Read the full article published by Kluwer Law International, Air and Space Law (2019), 44, Issue 3, pp.297-319: "Wet Lease Agreements and Competition Law"