EU clears major tie-ups in ailing airline sector

Europe's competition watchdog cleared the way for major tie-ups in the ailing airline industry on Wednesday, giving green lights to a British Airways and Iberia merger and a trans-Atlantic alliance.

BA, Iberia and American Airlines agreed last year to team up on flights between Europe and North America in order to cope with soaring fuel costs and falling demand.

The British and Spanish airlines also took a step further, signing a merger deal in April to create one of the world's biggest airlines to compete more effectively in the fast-consolidating aviation sector.

"Today's reality is one of increased consolidation in the sector due to the difficulties and changes that the sector has had to cope with," European competition commissioner Joaquin Almunia told a press conference.

The BA-Iberia tie-up will create Europe's second-biggest airline by market value after Lufthansa, combining Iberia's strong position in Latin America with BA's presence in Africa, Asia and North America.

The European Commission said its investigation found that the combined group would face sufficient competition from other carriers on the key routes between London and Spain as well as long-haul flights.

"The Commission therefore concluded that the transaction will not significantly impede effective competition on any of the markets concerned by the proposed merger," the EU regulator said.

BA said the merger is expected to be completed by the end of the year.

In a separate decision, the commission paved the way for a trans-Atlantic joint venture between "oneworld" alliance members British Airways, Iberia and American Airlines after the companies committed to competition safeguards.

The EU regulator had opened a probe in April 2009 over concerns that the alliance could harm consumers on trans-Atlantic routes.

To ease concerns, the airlines offered to free up landing and take-off slots at London Heathrow airport to facilitate the entry or expansion of competitors on routes between the British capital and New York, Boston, Dallas and Miami.

The commission said it decided to close its investigation after a market test concluded that the airlines had offered "suitable" remedies.

"This is a pragmatic decision so that we can get the joint business up and running as soon as possible," said BA chief executive Willie Walsh.

"The slot commitments provide a further guarantee that there will be no possible loss of competition as a result of our joint business," he said.

BA said it expected the US Department of Transportation to decided "shortly" whether to grant the airlines anti-trust immunity, with the hope of launching the joint business in the autumn.

The commission decided to make these commitments binding for 10 years and said it would appoint a trustee to oversee their implementation.

Almunia said the decision ensures that "the around 2.5 million passengers that use the London-New-York and other affected routes each year continue to benefit from a choice of frequencies and competitive prices."

Airlines have turned to alliances as takeovers and tie-ups are fraught with difficulty, with many countries imposing limits on foreign ownership so as to favour the national carrier and protect their domestic markets.

The alliance system was set up in part to get around such hurdles and to allow cooperation so that member airlines could enjoy the advantages of scale provided by belonging to a bigger group.

Airlines were pummeled by the global recession, losing nearly 10 billion euros last year. But the International Air Transport Association (IATA) said they would be profitable this year for the first time since 2007.

lth/hd

 

Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Travel
ebookHow to enjoy the perfect short break in 20 great cities
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
tech
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Ashdown Group: Data Manager - £Market Rate

    Negotiable: Ashdown Group: Data Manager - MySQL, Shell Scripts, Java, VB Scrip...

    Ashdown Group: Application Support Analyst - Bedfordshire/Cambs border - £32k

    £27000 - £32000 per annum: Ashdown Group: Application Support Analyst - near S...

    Recruitment Genius: Class 1 HGV Driver

    £23000 - £27000 per annum: Recruitment Genius: This successful group of compan...

    Recruitment Genius: HGV Class 2 Lorry Driver / CPC and HIAB Training Provider

    £29000 per annum: Recruitment Genius: A HGV Class 2 Lorry Driver is required t...

    Day In a Page

    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas
    La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

    Deaf community outraged by La Famille Bélier

    The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
    10 best high-end laptops

    10 best high-end laptops

    From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
    Susie Wolff: A driving force in battle for equality behind the wheel

    Susie Wolff: A driving force in battle for equality behind the wheel

    The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
    Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

    'No abs Adam' plans to muscle in on Usain Bolt's turf

    After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
    Calls for a military mental health 'quality mark'

    Homeless Veterans campaign

    Expert calls for military mental health 'quality mark'
    Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

    Meet Racton Man

    Analysis shows famous skeleton was a 6ft Bronze Age superman
    Garden Bridge: St Paul’s adds to £175m project’s troubled waters

    Garden Bridge

    St Paul’s adds to £175m project’s troubled waters
    Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

    Stuff your own Christmas mouse ornament

    An evening class in taxidermy with a festive feel
    Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

    Joint Enterprise

    The legal doctrine which critics say has caused hundreds of miscarriages of justice
    Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

    Freud and Eros

    Love, Lust and Longing at the Freud Museum