On 27 June the Commission adopted a Decision to prohibit the proposed takeover by Ryanair of Aer Lingus. The acquisition would have combined the two leading airlines operating from Ireland which competed vigorously against each other. Both Ryanair and Aer Lingus were by far the largest airlines offering short-haul flights to and from Ireland. Their position was particularly strong on routes to and from Dublin, where the merged entity would have accounted for around 80% of all intra- European traffic.
During 2007 the Commission completed its investigation into government assistance to a carrier in difficulty (Cyprus Airways109), concluding that the restructuring plan submitted by the Cypriot authorities was compatible with the common market. In relation to the long-running case of Olympic Airways/Airlines the Commission opened a further investigative procedure into alleged State aid granted to this company since 2005110.
On 30 April the European Union and the United States of America signed a treaty establishing an open aviation area between the EU and US111. This agreement, which enters into force on 30 March 2008, allows for the consolidation of the EU aviation sector by recognising all European airlines as “Community air carriers” and allowing any such Community air carrier to fly between any point in the EU and any point in the US, without any restriction on pricing or capacity. It also includes provisions for strengthening cooperation between the Commission and the US Department of Transportation (DoT) in the competition field.
The Commission actively negotiated its proposal according to the co-decision procedure (Article 251 EC)112. Following the first reading by Parliament, the Council reached a political agreement during the Telecommunications and Energy Council in Luxembourg on 1 October. On the basis of this agreement, the Common Position was formally adopted by the Council on 8 November. However, the Common Position sets 2011 and for certain Member States 2013 as the starting date for market opening.
In the State aid area the Commission in particular examined compensations for public service obligations granted to postal operators to ensure that these compensations do not exceed the actual costs of discharging the public service obligations and do not cross-subsidise commercial activities.
Where a compensation for a service of general economic interest (SGEI) does not fulfil the conditions set out in the Altmark113 case law and therefore cannot escape qualification asState aid, it can however be declared compatible with the Treaty
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C 10/06, not yet reported. C 61/07, not yet reported. OJ L 134, 25.5.2007, p. 4. On 18 October 2006, the Commission put forward a proposal to open up EU postal markets fully to competition by 2009, in line with the indicative target date set out in the current Postal Directive. Case C-280/00, Altmark Trans GmbH  ECR I-7747.