EC greenlights BA-Iberia merger

The merger of BA and Iberia was approved after the EC decided the transaction would not significantly impede competition in the European Economic Area.

The EC said the merged entity would continue to be subject to competition from a number of competitors on the markets for air cargo transport and ground-handling services.

It also examined the impact of the merger between the two European airlines on short-haul and long-haul passenger services and concluded that the carriers would continue to “face stiff competition from other carriers”.

While transatlantic partnership has been approved in Europe, the three carriers still need a final stamp of approval from the US Department of Transportation (DoT) to proceed.

The DoT granted preliminary approval on 13 February, but has still to issue the formal order.

The EC, which last year raised questions about whether the carriers’ joint business agreement would be anti-competitive, accepted some concessions offered by the partners.

The carriers, all members of the Oneworld alliance, plan to greatly expand code-sharing – selling their partners’ flights under their own name and flight number. They’ll also co-operate on pricing, scheduling and marketing.

In their DoT application, the three carriers are also asking for antitrust immunity with fellow Oneworld members Finnair and Royal Jordanian Airlines. They plan to begin their new relationship in the autumn.

BA CEO Willie Walsh said: “We await the DoT’s final decision, but welcome this important and vital step forward.”

He added: “The slot commitments provide a further guarantee that there will be no possible loss of competition as a result of our joint business.”

However, Virgin Atlantic has opposed the application, arguing that American and BA already held too strong a competitive position at Heathrow.

Source: IFW