Extraterritorial application of EU law to airline mergers

The airline industry exhibits innate tendency toward consolidation. It goes without saying that bigger carriers would have competitive edge due to various scale-related synergies. And while such process may not necessary be detrimental for market structure and for the customers, the issue of efficiency of regulatory oversight remains. The problem could be boiled down to a dilemma how to control mergers in global industry through legal instruments with limited territorial scope. This paper provides an overview of both the regulatory setting and controversies relating to extraterritorial application of European Union's Merger Control Regulation with particular emphasis on differentia specifica of air transport.