incitatus
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Joined: Wed Feb 09, 2005 1:49 am

Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 1:19 pm

With Air France being a prospective buyer of Alitalia as well as a potential bidder for Iberia, we may be seeing a large tie up in Europe. Would it be allowed?

The EU even axed the purchase of Air Lingus by Ryanair. It seems that allowing Air France to pile up any additional number of the old flag carriers would be at least very controversial.
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scouseflyer
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 1:23 pm

if they did they'd then have to allow BA and LH to merge otherwise AF_KL_IB_AZ would be a monster that would gobble up everyone else!
 
adicool
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 1:56 pm

If AF/KL were to buy AZ and IB, they would have a quasi monopole between Europe and Latin America...don't really think it will happen anyways, IB and AZ at once would be too much, even for AF/KL.
 
ANother
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 3:01 pm

Quoting Adicool (Reply 2):
If AF/KL were to buy AZ and IB, they would have a quasi monopole between Europe and Latin America...don't really think it will happen anyways, IB and AZ at once would be too much, even for AF/KL.

Our friends in the Commission are more concerned with 'markets' than with route density.

For example what % of the French, Dutch, Spanish and/or Italian markets for air transport would such an entity control. In the case of Ireland and FR/EI they determined that combined they would control an overwhelming majority of the Irish market. Would this be the case from such a merger? Collectively they will obviously control a larger percentage of the total, but I don't think in any of the four markets it would be overwhelming. e.g. LH and BA are very big in the Italian markets and would be expected to offer significant competition to 'the beast'.

In any case expect the four 'entities' (if it happens) to operate separately like AF & KL do today. The biggest challenge to cross-border mergers remain the silly ownership and control rules.
 
flysherwood
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 3:41 pm

Quoting Incitatus (Thread starter):
With Air France being a prospective buyer of Alitalia as well as a potential bidder for Iberia, we may be seeing a large tie up in Europe. Would it be allowed?

My question would be, who would want to fly it? Can you imagine the mess of bringing AZ into the fold? IB wouldn't be so bad to integrate, but AZ? My God, just think of the number of strikes management might have to fear between those four brands?  Wink
 
MaverickM11
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 4:18 pm

Quoting ANother (Reply 3):
In the case of Ireland and FR/EI they determined that combined they would control an overwhelming majority of the Irish market

Any commission that allows AF+KL but not FR/EI is suspect, nevermind AF+KL+IB+AZ
E pur si muove -Galileo
 
ANother
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RE: Would The EU Allow AF+KL+IB+AZ?

Tue Oct 09, 2007 5:36 pm

Quoting MaverickM11 (Reply 5):
Any commission that allows AF+KL but not FR/EI is suspect, nevermind AF+KL+IB+AZ

Well, that may be your opinion. But the definition of 'market' here is key. When they looked at FR/EI they didn't look at the routes that both airlines flew, where competition would be reduced if they merged - but looked at the Irish market for air transport - i.e all o&ds out of Ireland. Using this analysis the merger would have significantly reduced competition in Ireland for air services.

Now, did the semi-merger of AF/KL significantly reduce competition in either France or the Netherlands? Maybe, but not to the same degree as EI/FR in Ireland. AF wasn't 'that' big in Netherlands and KL wasn't 'that' big in France. Does significant competition to AF/KL remain in the French/Dutch markets for air services? I think the answer is yes.

Don't get me wrong, I'm not saying I agree with DG-COMP's view - just trying to explain it, as I understand it.