European Commission approves merger between British Airways and Iberia
14-Jul-2010 The European Commission has cleared under the EU Merger Regulation the proposed merger between British Airways of the UK and Iberia of Spain, both active in air passenger and cargo transport and related services.
The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
British Airways provides scheduled air passenger and cargo transport as well as related services (groundhandling and maintenance, repair and overhaul (MRO) services). It serves some 150 cities in about 75 countries with an additional 215 cities served under various code-sharing relationships. It has several subsidiaries (CityFlyer, OpenSkies) and franchisees (Comair and Sunair). British Airways has its main hub at London Heathrow airport and also operates bases at London Gatwick and London City.
Iberia provides scheduled air passenger and cargo transport and related services (groundhandling and MRO services). It serves more than 106 destinations in over 43 countries with an additional 110 cities served under various code-sharing relationships. Its main hubs are in Madrid and Barcelona. IB's operations in Barcelona are carried out mainly through its subsidiary Vueling. IB's franchisee Air Nostrum operates mostly on Spanish domestic routes.
Both British Airways and Iberia are members of the oneworld alliance. Their activities overlap in the areas of passenger transport by air, cargo transport by air, groundhandling and MRO services.
Regarding passenger transport, the Commission examined notably the impact of the proposed transaction on the short-haul routes London-Madrid and London-Barcelona. The Commission's investigation showed that the merged entity will continue to face sufficient competition from other carriers active on these routes, and therefore that passengers will have adequate alternatives to fly on these routes after the merger.
The Commission also examined the effects of the proposed merger on a number of short- and long-haul routes on which one party offers a non-stop connection while the other party offers a one-stop connection, or on which both parties offer one-stop connections. Also on these routes, the Commission's investigation showed that the merged entity will continue to face enough competition after the merger.
Finally, the Commission's investigation confirmed that the merged entity will also continue to be subject to competition from a number of competitors on the markets for air cargo transport and groundhandling services, and that the proposed merger will not have a significant impact on the market for MRO services.
The Commission therefore concluded that the transaction will not significantly impede effective competition on any of the markets concerned by the proposed merger.