Italian Supreme Court – Authorized Access to Contracts Between Local Airports and Ryanair
On 20th April 2018 the Italian Supreme Court rendered a decision (no. 9912) affirming that Alitalia shall be entitled to have sight of the contracts entered into between Ryanair and the managing companies of four Italian airports in 2009 and 2014, namely Alghero, Bari, Trapani and Verona. The long awaited ruling, which essentially overturned the previous judgments given by the Italian Administrative Courts to deny the Alitalia’s claims, established an important case-law in relation to the contracting activity of airports’ management companies with low-cost carriers and, in particular, with Ryanair, being the first airline operating in Italy in terms of carried passengers on national and international routes (36 million in 2017).
Indeed the Irish carrier is believed to benefit from significant aid from local airports, which are attributable to considerable financing from the local entities to the carrier. In return, on the one side the airports took advantages from advertisement campaigns and promotional activities and, on the other side, the involved regions can enjoy a huge increase of tourism and business connections in their territories. The relationship between local airports and low-cost carriers is estimated to value more than Euro 100 million per year. In this respect, Alitalia had argued that the disputed practice would affect the playing field between competitors, conferring a ‘non-commercial’ benefit to the low-cost carriers, which, due to such aids, could offer lower fares to customers. On the other hand, the Italian airports’ line of argumentation was entirely based on the fact that such agreements have become common practice for mid-size and small local airports throughout Europe, and they would fall within the broader structure of the so-called ‘co-marketing’ agreements.
However, according to the Supreme Court, these contracts are not private agreements, but, instead, even if entered into between private operators they must be considered as public documents relating to commercial interests of the administrative local entities.
As a result, accepting Alitalia’s arguments, the Court found that the claimant shall be permitted to have full and unconditional access to the agreements concluded by the mentioned airports with Ryanair. The decision at hand represents an important turning point for the fierce competition between carriers in regional markets, as well as significant precedent to be used for having access to contracts with other low-cost carriers.
This article, written by L2b member Marco Marchegiani of Studio Pierallini, was originally published in Aviation Journal May 2018, no. 2.