The Competition and Markets Authority (CMA) has launched an investigation into the proposed acquisition of Air Europa by the International Airlines Group.
The parent company of British Airways and Iberia first announced plans to buy Air Europa back in later 2019.
At the time a price of €1 billion was agreed for the takeover, but a much changed aviation landscape due to the Co vid-19 pandemic subsequently resulted in the purchase price being halved to just €500 million.
In a press release the CMA said that it would consider “whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
A statutory deadline of January 19, 2022 has been placed for a phase 1 decision, although the CMA stressed that it “cannot guarantee that the decision will be announced on or before this current deadline, as the deadline of a given case may change during the merger assessment process due to different reasons”.
In June of this year The European Commission also opened “an in-depth investigation to assess the proposed acquisition of Air Europa by IAG, under the EU Merger Regulation”.
The Commission said that IAG and Air Europa were respectively the first and third largest providers of scheduled passenger air transport services in Spain, adding that “We will carefully assess whether the proposed transaction would negatively affect competition on domestic, short-haul and long-haul routes to and from Spain, possibly leading to higher prices and reduced quality for travellers”.
IAG said in its latest interim financial results that “On October 27, 2021 Iberia submitted remedies to the European Commission as part of the Commission’s ongoing review of the proposed acquisition of Air Europa by Iberia”.
No further details were given on the remedies submitted.
