Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
 
TYWoolman
Posts: 607
Joined: Sat Jun 24, 2017 8:24 pm

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 3:18 pm

spinotter wrote:
TYWoolman wrote:
Why hasn't Delta made a statement about this? Is it down-playing the significance of the deal by being silent? Or is the LATAM deal enough to quell its shareholders?


Quell its shareholders? I can tell that you are a big fan of DL. I do not hold any shares whatsoever, of DL or any other company, but I have always assumed that DL shareholders are better satisfied than AA shareholders or UA shareholders, merely by looking at DL's annual earnings. Do DL shareholders really need to be quelled in your estimation? DL can not buy LA and UX both in the same week, can they? I wonder how much IAG jumping on UX came as a result of DL grabbing LA. Losing G3 and UX, replacing them with LA - I think that's a pretty good trade for DL, don't you? Especially if DL can bring some of their money and service magic to LA, which is sorely in need of some magic. I want to hear from these quelled shareholders, if any!


I am a big Delta fan, yes. I do think it's a fair trade, so to speak. And while "quell" may not have been the correct word, a non-presence on the Iberian penninsula may prove problematic strategically for Delta if IAG-Iberia succeed at turning Madrid into the go-to hub between Europe and South America. I hope that I quelled your concern on the use of my word quell. :)
Last edited by TYWoolman on Fri Nov 08, 2019 3:21 pm, edited 2 times in total.
 
User avatar
spinotter
Posts: 793
Joined: Wed May 27, 2015 1:37 am

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 4:16 pm

TYWoolman wrote:
spinotter wrote:
TYWoolman wrote:
Why hasn't Delta made a statement about this? Is it down-playing the significance of the deal by being silent? Or is the LATAM deal enough to quell its shareholders?


Quell its shareholders? I can tell that you are a big fan of DL. I do not hold any shares whatsoever, of DL or any other company, but I have always assumed that DL shareholders are better satisfied than AA shareholders or UA shareholders, merely by looking at DL's annual earnings. Do DL shareholders really need to be quelled in your estimation? DL can not buy LA and UX both in the same week, can they? I wonder how much IAG jumping on UX came as a result of DL grabbing LA. Losing G3 and UX, replacing them with LA - I think that's a pretty good trade for DL, don't you? Especially if DL can bring some of their money and service magic to LA, which is sorely in need of some magic. I want to hear from these quelled shareholders, if any!


I am a big Delta fan, yes. I do think it's a fair trade, so to speak. And while "quell" may not have been the correct word, a non-presence on the Iberian penninsula may prove problematic strategically for Delta if IAG-Iberia succeed at turning Madrid into the go-to hub between Europe and South America. I hope that I quelled your concern on the use of my word quell. :)


Not really. Quell has all kinds of negative resonances. I can't believe that a "big fan of DL" would use that verb about Delta's tretment of their own shareholders. DL can inject their own allies into the Iberian peninsula from Latin America - GRU, GIG, SCL, LIM, EZE, UIO, GYE, BOG, BSB, MVD, etc. nonstop to LIS, OPO, MAD, BCN, AGP, VLC, SVQ, etc. IAG is now short of allies on the South American side. Time for Delta to swoop in and quell the competition.
 
Kadish
Posts: 370
Joined: Thu Aug 31, 2017 11:36 am

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 4:37 pm

spinotter wrote:
TYWoolman wrote:
spinotter wrote:

Quell its shareholders? I can tell that you are a big fan of DL. I do not hold any shares whatsoever, of DL or any other company, but I have always assumed that DL shareholders are better satisfied than AA shareholders or UA shareholders, merely by looking at DL's annual earnings. Do DL shareholders really need to be quelled in your estimation? DL can not buy LA and UX both in the same week, can they? I wonder how much IAG jumping on UX came as a result of DL grabbing LA. Losing G3 and UX, replacing them with LA - I think that's a pretty good trade for DL, don't you? Especially if DL can bring some of their money and service magic to LA, which is sorely in need of some magic. I want to hear from these quelled shareholders, if any!


I am a big Delta fan, yes. I do think it's a fair trade, so to speak. And while "quell" may not have been the correct word, a non-presence on the Iberian penninsula may prove problematic strategically for Delta if IAG-Iberia succeed at turning Madrid into the go-to hub between Europe and South America. I hope that I quelled your concern on the use of my word quell. :)


Not really. Quell has all kinds of negative resonances. I can't believe that a "big fan of DL" would use that verb about Delta's tretment of their own shareholders. DL can inject their own allies into the Iberian peninsula from Latin America - GRU, GIG, SCL, LIM, EZE, UIO, GYE, BOG, BSB, MVD, etc. nonstop to LIS, OPO, MAD, BCN, AGP, VLC, SVQ, etc. IAG is now short of allies on the South American side. Time for Delta to swoop in and quell the competition.


Allies are always wellcome, but I dont see the problem of not having a lot of partners in south america. Ux planes can be used to open routes in secondary cities and in big cities like EZE, BOG,GRU,LIM...ux and ib toghether will have a lot of frequencies ...
 
onwFan
Posts: 436
Joined: Wed Feb 03, 2016 4:02 am

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 4:52 pm

spinotter wrote:
TYWoolman wrote:
spinotter wrote:

Quell its shareholders? I can tell that you are a big fan of DL. I do not hold any shares whatsoever, of DL or any other company, but I have always assumed that DL shareholders are better satisfied than AA shareholders or UA shareholders, merely by looking at DL's annual earnings. Do DL shareholders really need to be quelled in your estimation? DL can not buy LA and UX both in the same week, can they? I wonder how much IAG jumping on UX came as a result of DL grabbing LA. Losing G3 and UX, replacing them with LA - I think that's a pretty good trade for DL, don't you? Especially if DL can bring some of their money and service magic to LA, which is sorely in need of some magic. I want to hear from these quelled shareholders, if any!


I am a big Delta fan, yes. I do think it's a fair trade, so to speak. And while "quell" may not have been the correct word, a non-presence on the Iberian penninsula may prove problematic strategically for Delta if IAG-Iberia succeed at turning Madrid into the go-to hub between Europe and South America. I hope that I quelled your concern on the use of my word quell. :)


Not really. Quell has all kinds of negative resonances. I can't believe that a "big fan of DL" would use that verb about Delta's tretment of their own shareholders. DL can inject their own allies into the Iberian peninsula from Latin America - GRU, GIG, SCL, LIM, EZE, UIO, GYE, BOG, BSB, MVD, etc. nonstop to LIS, OPO, MAD, BCN, AGP, VLC, SVQ, etc. IAG is now short of allies on the South American side. Time for Delta to swoop in and quell the competition.


The last time I heard, LATAM is barely able to sustain GRU-LIS. And you are thinking about MVD-VLC? :-) LA just withdrew from GYE-MAD and BOG-MIA. It is clear that LA is going to center its international operations around LIM, SCL and GRU.

IAG will have plenty of partners in different markets: Avianca, G3, Sky, TAME and most possibly Aerolineas. The actual loss for oneworld is Intra-Latam international connectivity. And neither AA nor IAG is interested in connecting a passenger from MIA or MAD to SCL via LIM or GRU or EZE. But neither oneworld nor SkyTeam will have that Intra-Latam connectivity unless LA joins SkyTeam (unless you think Sky is only DL/AF/KL/AM/KE/MU, which I think it is)

LA will be left with no partners in MIA and MAD, their most commercially important markets. LATAM’s history in non-partner hubs has been terrible; but of course I keep forgetting one thing - DL has magical powers! So no doubt, suddenly after the deal, LA will be able to do everything they cannot do now! :-P
 
User avatar
spinotter
Posts: 793
Joined: Wed May 27, 2015 1:37 am

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 7:42 pm

onwFan wrote:
spinotter wrote:
TYWoolman wrote:

I am a big Delta fan, yes. I do think it's a fair trade, so to speak. And while "quell" may not have been the correct word, a non-presence on the Iberian penninsula may prove problematic strategically for Delta if IAG-Iberia succeed at turning Madrid into the go-to hub between Europe and South America. I hope that I quelled your concern on the use of my word quell. :)


Not really. Quell has all kinds of negative resonances. I can't believe that a "big fan of DL" would use that verb about Delta's tretment of their own shareholders. DL can inject their own allies into the Iberian peninsula from Latin America - GRU, GIG, SCL, LIM, EZE, UIO, GYE, BOG, BSB, MVD, etc. nonstop to LIS, OPO, MAD, BCN, AGP, VLC, SVQ, etc. IAG is now short of allies on the South American side. Time for Delta to swoop in and quell the competition.


The last time I heard, LATAM is barely able to sustain GRU-LIS. And you are thinking about MVD-VLC? :-) LA just withdrew from GYE-MAD and BOG-MIA. It is clear that LA is going to center its international operations around LIM, SCL and GRU.

IAG will have plenty of partners in different markets: Avianca, G3, Sky, TAME and most possibly Aerolineas. The actual loss for oneworld is Intra-Latam international connectivity. And neither AA nor IAG is interested in connecting a passenger from MIA or MAD to SCL via LIM or GRU or EZE. But neither oneworld nor SkyTeam will have that Intra-Latam connectivity unless LA joins SkyTeam (unless you think Sky is only DL/AF/KL/AM/KE/MU, which I think it is)

LA will be left with no partners in MIA and MAD, their most commercially important markets. LATAM’s history in non-partner hubs has been terrible; but of course I keep forgetting one thing - DL has magical powers! So no doubt, suddenly after the deal, LA will be able to do everything they cannot do now! :-P


Yes, it's true - DL has magical powers. Wait until two years from now, and then there will be VLC-MVD and so on, so many profitable nonstops that your head will be spinning, under the aegis of the most profitable airline in the world, Delta Air Lines.
 
YIMBY
Posts: 723
Joined: Tue Sep 20, 2016 4:32 pm

Re: IAG to buy Air Europa for €1 billion

Fri Nov 08, 2019 8:50 pm

BA777FO wrote:
Completely agree and that's most likely the way the EU will see this. The EU is a single market and given that there are no restrictions or constraints on new entrants in the Spanish market I don't see carveouts being necessary.


There are huge barriers of entrance for new entrants in any market, particularly to make a major base. Those barriers are commercial. They have to invest on hardware, spend money in negotiations, contracts, etc, hire staff, get slots, plan routes, make marketing campaigns.

While I am sure that some major (e.g. LH, KL) or minor (whatever regional) airlines will try to enter and capture their share, knowing that there is an opportunity when IAG group raises the ticket prices, it will not happen overnight, but may be a year long process. It may be easier for airlines that have experience on it (i.e. LCC's) but not so easy for the wannabe-millionaire-startups. For anyone, it is a great risk, as there may be another similar airline that will do it better.

Of course, just increasing flights to Spain from homebase is relatively easy. Is that enough for EC?

There are also other ways to lower the barrier, like banning the loyalty programs for the dominant player. Would that be doable?
 
TYWoolman
Posts: 607
Joined: Sat Jun 24, 2017 8:24 pm

Re: IAG to buy Air Europa for €1 billion

Sat Nov 09, 2019 1:33 am

Let me quell ya'lls concerns. Once LATAM has room to breath after getting loose of American's talons, new service initiatives and marketing strategies will emerge. However, I think American will also be successful and thrive and will not sit idle.
 
Nola
Posts: 380
Joined: Thu May 29, 2014 1:40 am

Re: IAG to buy Air Europa for €1 billion

Mon Nov 11, 2019 2:06 am

Why can't AF-KL just start flying Transavia flights from Madrid to wherever to match up with the Latam feed?
 
Andy33
Posts: 2567
Joined: Tue Sep 15, 2009 9:30 am

Re: IAG to buy Air Europa for €1 billion

Mon Nov 11, 2019 6:46 am

There are several potential problems with operating Transavia from Madrid to South/Central America.
Firstly, Transavia has no longhaul planes in the fleet. So they'd need to go through all the procedures for adding new types, gaining ETOPS approval etc.
Secondly, some of the destination countries will still have bilateral agreements that only permit airlines registered in Spain or the destination country to operate between them, though others will have the more modern agreements allowing any ECAA airline.
Thirdly, there's the Air France and KLM unions, which may well object to Transavia starting longhaul.
 
Ishrion
Posts: 2832
Joined: Mon Feb 04, 2019 6:17 am

Re: IAG to buy Air Europa for €1 billion

Mon Nov 11, 2019 6:48 am

Old article from 2016: https://www.ch-aviation.com/portal/news/45559

"Air France-KLM studying Air Europa acquisition". Lmao.
 
QR1350
Posts: 21
Joined: Tue Mar 26, 2019 7:11 am

Re: IAG to buy Air Europa for €1 billion

Mon Nov 11, 2019 6:49 pm

Andy33 wrote:
There are several potential problems with operating Transavia from Madrid to South/Central America.
Firstly, Transavia has no longhaul planes in the fleet. So they'd need to go through all the procedures for adding new types, gaining ETOPS approval etc.
Secondly, some of the destination countries will still have bilateral agreements that only permit airlines registered in Spain or the destination country to operate between them, though others will have the more modern agreements allowing any ECAA airline.
Thirdly, there's the Air France and KLM unions, which may well object to Transavia starting longhaul.


I think they meant fly Transavia to MAD to connect with the LA feed allowing you to fly LATAM-MAD-Europe with Transavia.
 
Nola
Posts: 380
Joined: Thu May 29, 2014 1:40 am

Re: IAG to buy Air Europa for €1 billion

Tue Nov 12, 2019 7:34 pm

QR1350 wrote:
Andy33 wrote:
There are several potential problems with operating Transavia from Madrid to South/Central America.
Firstly, Transavia has no longhaul planes in the fleet. So they'd need to go through all the procedures for adding new types, gaining ETOPS approval etc.
Secondly, some of the destination countries will still have bilateral agreements that only permit airlines registered in Spain or the destination country to operate between them, though others will have the more modern agreements allowing any ECAA airline.
Thirdly, there's the Air France and KLM unions, which may well object to Transavia starting longhaul.


I think they meant fly Transavia to MAD to connect with the LA feed allowing you to fly LATAM-MAD-Europe with Transavia.


Yes, that is what I meant.
 
PHLCVGAMTK
Posts: 112
Joined: Tue Aug 29, 2017 6:50 pm

Re: IAG to buy Air Europa for €1 billion

Tue Nov 12, 2019 11:31 pm

onwFan wrote:
JAMBOJET wrote:
To Jetty's point above: LOTS of overlap (this is a straight copy/paste from Cranky too) where there would be zero competition going forward.

Europe
A Coruña
Alicante
Asturias
Barcelona
Bilbao
Dusseldorf
Málaga
Sevilla
Valencia
Venice
Vigo

Americas:
Miami*
Montevideo
Panama City
Santo Domingo (DR)
*Miami counts only if you include joint venture partner American’s service


Thanks for this information! I think competition wise, domestic Spain and Miami are the ones that will be most affected. Perhaps Norwegian would be interested in MAD-MIA like they did with AMS-JFK and FCO-JFK with the divestitures from investigation into the AF/KL/DL JV. Ryanair will be first in line for domestic Spain routes. One thing I find quite interesting is that MOL doesn't say that he doesn't want the merger to go through - Instead, he simply says he will make sure there are divestitures - which is probably even better for him, as it would appear that Ryanair stands to gain the most. This is probably the best chance for Ryanair to expand their MAD hub. Any chance that easyJet could get a foot in between?

I don't think routes like MVD/PTY will raise as much of an issue - some of these routes were started not long ago and not even daily during most of the year. It could be even said that the combined carrier would be better positioned to better serve these daily & launch new destinations in Central/South America that are currently unserved from Europe non-stop; rather than multiple non-daily flights by each carrier on existing routes. COR, CLO, MDE, MVD, ASU and secondary Brazil come to my mind.

I think a pattern is beginning to emerge in all the big European markets: one major flag carrier and Ryanair/easyJet + a few long haul holiday/leisure carriers/Norwegian. The times of two flag carriers are gone.


To the point of Domestic Spain competition, there is a competitor on every single one of those routes, and it's called RENFE. (Unless I missed something, which is always possible, all of the listed destinations in Spain are on the mainland, and not the islands.) IB/UX can just point to Spanish Government policy to shift MAD O&D traffic from air to rail, and claim, accurately, that if any planes are flying those routes at all in 15 years, they'll be exclusively feeding connection traffic, which means they're entirely exposed to competition from TP at LIS or AF/DL at CDG.
 
dmorbust
Posts: 148
Joined: Thu Feb 21, 2013 11:50 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 13, 2019 7:43 pm

dmorbust wrote:
panamair wrote:
Sightseer wrote:
Does UX not carry more total passengers through MAD than FR? Wikipedia's says so; obviously if there are better sources out there I'll take their word over Wiki. But if UX does carry more passengers than FR, then yes, it is absolutely comparable, and in any case the public interest is better served by more competition, especially long-haul where UX and IB are more comparably sized. But again, to repeat/elaborate on my first post, I don't see the EU sharing my opinion and restricting the merger.


Not exactly MAD but for the whole domestic Spanish market, IAG will control about 72% of it with the UX purchase.

From CAPA:
Domestic market by seat capacity 12 months to Sep 2019:

Vueling: 31.8%
Iberia: 26.1% (includes Iberia Express and Air Nostrum)
Air Europa: 15.0%
Ryanair: 13.3%
BinterCanarias: 8.7%
Norwegian: 1.9%
CanaryFly: 1.8%
Volotea: 0.8%
Others: 0.4%

From Spanish paper ElPais:
https://cincodias.elpais.com/cincodias/ ... 99892.html

Domestic Market by Pax carried Jan to Sep 2019:

Vueling: 32.1%
Iberia: 26.0% (includes IB Express and Air Nostrum)
Ryanair: 14.6%
Air Europa: 14.1%
BinterCanarias: 4.9%
Canarias Airlines: 4.6%
Norwegian: 1.6%
CanaryFly: 1.3%


Thanks for sharing. No way the EU competition authorities allow this without huge carveouts that would render the deal useless to IAG. I really think this was a poor move by Hidalgo, who should have been patient to accept what seemed to have been a similar but phased deal from AF/KLM: https://www.elconfidencial.com/empresas ... s_2313364/ .

Once the EU authorities reject this deal, I wonder if AF/KLM can get away with offering less since there are really no other potential bidders that I can think of besides LH group.


Now I see why Hidalgo accepted IAG's offer - it comes with a €40 million breakup fee if IAG doesn't close: http://www.travelweekly.co.uk/articles/ ... ces-hurdle
 
BealineV953
Posts: 187
Joined: Fri Jul 26, 2019 10:00 am

Re: IAG to buy Air Europa for €1 billion

Thu Nov 14, 2019 11:17 am

YIMBY wrote:
BA777FO wrote:
Completely agree and that's most likely the way the EU will see this. The EU is a single market and given that there are no restrictions or constraints on new entrants in the Spanish market I don't see carveouts being necessary.


There are huge barriers of entrance for new entrants in any market, particularly to make a major base. Those barriers are commercial. They have to invest on hardware, spend money in negotiations, contracts, etc, hire staff, get slots, plan routes, make marketing campaigns.

While I am sure that some major (e.g. LH, KL) or minor (whatever regional) airlines will try to enter and capture their share, knowing that there is an opportunity when IAG group raises the ticket prices, it will not happen overnight, but may be a year long process. It may be easier for airlines that have experience on it (i.e. LCC's) but not so easy for the wannabe-millionaire-startups. For anyone, it is a great risk, as there may be another similar airline that will do it better.

Of course, just increasing flights to Spain from homebase is relatively easy. Is that enough for EC?

There are also other ways to lower the barrier, like banning the loyalty programs for the dominant player. Would that be doable?


In the economic sense, ‘barriers to entry’ are typically those things that the entrant does not have control over. For airlines this would often include things like:
* Obtaining route licences
* Obtaining landing and take-off slots at slot restricted airports.
* Gaining access to gates

The intra-EU market is deregulated; route licences are not needed.
To markets beyond the EU route licenses are needed. However, the EU has liberal agreements in place with a number of countries, and securing a route licence for those markets is relatively straightforward.
To enable competition, regulators may make their approval of a deal (merger, acquisition, joint venture or whatever) conditional on slots being made available to prospective competitors.
So, although there are barriers to entry, regulators may remove or lower them.

Existing EU competition law includes provisions to prevent companies from abusing a dominant position. For airlines this may, for example, limit the incentive schemes an airline has in place with Travel Agents.
So, these ‘barriers’ are effectively lowered.

Most of the ‘barriers’ you list (plan routes, invest on hardware, contracts, hire staff, make marketing campaigns) are simply the normal costs of doing business.
An established airline wanting to enter or grow in the market will be well used to these costs.
Established airlines and ‘wannabe-millionaire-startups’ have to make a judgement as to whether they are likely to get a return on their investment.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
User avatar
zkojq
Posts: 4314
Joined: Fri Sep 02, 2011 12:42 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 5:29 am

panamair wrote:

Not exactly MAD but for the whole domestic Spanish market, IAG will control about 72% of it with the UX purchase.

From CAPA:
Domestic market by seat capacity 12 months to Sep 2019:

Vueling: 31.8%
Iberia: 26.1% (includes Iberia Express and Air Nostrum)
Air Europa: 15.0%
Ryanair: 13.3%
BinterCanarias: 8.7%
Norwegian: 1.9%
CanaryFly: 1.8%
Volotea: 0.8%
Others: 0.4%

From Spanish paper ElPais:
https://cincodias.elpais.com/cincodias/ ... 99892.html

Domestic Market by Pax carried Jan to Sep 2019:

Vueling: 32.1%
Iberia: 26.0% (includes IB Express and Air Nostrum)
Ryanair: 14.6%
Air Europa: 14.1%
BinterCanarias: 4.9%
Canarias Airlines: 4.6%
Norwegian: 1.6%
CanaryFly: 1.3%

Thanks for sharing. No way the EU competition authorities allow this without huge carveouts that would render the deal useless to IAG. I really think this was a poor move by Hidalgo, who should have been patient to accept what seemed to have been a similar but phased deal from AF/KLM:


Indeed. AFKL is the best suitor for IAG and a takeover by them would have minimal effect on competition. Allowing IAG to control 76% of the seats in the Spanish market through the takeover of a profitable competitor who isn't on the verge of bankruptcy is blatantly anti competitive and will lead to price hikes and capacity reduction and fewer employment opportunities.

JAMBOJET wrote:
Honest question here. Why does it matter what the domestic Spanish market is?

Because the Spanish domestic market is where competition will be taken away from. Air Europa don't fly domestic routes in France/Germany....

JAMBOJET wrote:
The EU is a single aviation market. Air France could start a hub in BCN tomorrow if they wanted. I know they won’t but I don’t understand why the relevant measurement for this would be the Spanish market? Isn’t the relevant metric the size of IAG within the single market of the EU?
It would be like only considering the state of Georgia and saying Delta should be broken up due to their size there.

No, this is nonsense. The possibility of competition =/= actual competition. Air Europa is a going concern and barriers to market entry. An airline with an effective hub and an extensive network is far more effective at ensuring competition than it's individual parts. Especially in a market dominated by a significantly larger competitor.

JAMBOJET wrote:
It would be like only considering the state of Georgia and saying Delta should be broken up due to their size there.

This isn't about breaking up an airline, this is about preventing a merger which would significantly reduce competition on a lot of routes.

A far more accurate comparison would be if Delta tried to takeover AirTran....

BA777FO wrote:
The EU is a single market and given that there are no restrictions or constraints on new entrants in the Spanish market I don't see carveouts being necessary.

Again, more nonsense. The possibility of competition at some point in the future =/= actual competition.

onwFan wrote:
FRA will not be what it is without LH’s domination.
CDG will not be what it is without AF’s domination.
MAD is not & cannot be what it can with both Iberia & UX competing. I am talking more along the lines of route diversity. Maybe instead of five daily flights to MAD-EZE, we could have thrice daily MAD-EZE, once daily COR and once daily MDZ? Route aithorities permitting of course.


Nonsense. Fares ex-FRA are sky high thanks to LH's domination. Paris actually has a lot of competition (eg 10 carriers flying PAR-NYC)

In the MAD case, rather than five daily flights MAD-EZE, you'll have three daily flights with much higher fares and worse customer service (since now IAG has to compete much less for everyone's business). Read up on monopolistic behaviour. Corporations exist to make money, not to provide route diversity.

alan3 wrote:
May as well scoop up Plus Ultra while they are at it. Or, might Plus Ultra add a couple of new Latam routes now that they only have 1 competitor in the market instead of 2.

If IAG buys Air Europa, Plus Ultra will be quickly squeezed out of existence.

Nola wrote:
Why can't AF-KL just start flying Transavia flights from Madrid to wherever to match up with the Latam feed?

Because IAG will have even more market power and will capacity dump to keep them out.


PHLCVGAMTK wrote:
To the point of Domestic Spain competition, there is a competitor on every single one of those routes, and it's called RENFE. (Unless I missed something, which is always possible, all of the listed destinations in Spain are on the mainland, and not the islands.) IB/UX can just point to Spanish Government policy to shift MAD O&D traffic from air to rail, and claim, accurately, that if any planes are flying those routes at all in 15 years, they'll be exclusively feeding connection traffic, which means they're entirely exposed to competition from TP at LIS or AF/DL at CDG.


What about Melilla? I was looking at flying Malaga to Melilla recently. Both IB (opb Air Nostrum) and UX (opb Swiftair) fly the route which kept prices very reasonable. One can expect prices would skyrocket in the event of a merger.

If you live in Vigo and want to fly to the Belerics, the RENFE isn't much use. As I said above an airline with an effective hub and a good range of destinations is far more valuable to competition than the sum of its parts.
First to fly the 787-9
 
User avatar
zkojq
Posts: 4314
Joined: Fri Sep 02, 2011 12:42 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 5:39 am

BealineV953 wrote:
YIMBY wrote:
BA777FO wrote:
Completely agree and that's most likely the way the EU will see this. The EU is a single market and given that there are no restrictions or constraints on new entrants in the Spanish market I don't see carveouts being necessary.


There are huge barriers of entrance for new entrants in any market, particularly to make a major base. Those barriers are commercial. They have to invest on hardware, spend money in negotiations, contracts, etc, hire staff, get slots, plan routes, make marketing campaigns.

While I am sure that some major (e.g. LH, KL) or minor (whatever regional) airlines will try to enter and capture their share, knowing that there is an opportunity when IAG group raises the ticket prices, it will not happen overnight, but may be a year long process. It may be easier for airlines that have experience on it (i.e. LCC's) but not so easy for the wannabe-millionaire-startups. For anyone, it is a great risk, as there may be another similar airline that will do it better.

Of course, just increasing flights to Spain from homebase is relatively easy. Is that enough for EC?

There are also other ways to lower the barrier, like banning the loyalty programs for the dominant player. Would that be doable?


In the economic sense, ‘barriers to entry’ are typically those things that the entrant does not have control over. For airlines this would often include things like:
* Obtaining route licences
* Obtaining landing and take-off slots at slot restricted airports.
* Gaining access to gates

The intra-EU market is deregulated; route licences are not needed.
To markets beyond the EU route licenses are needed. However, the EU has liberal agreements in place with a number of countries, and securing a route licence for those markets is relatively straightforward.
To enable competition, regulators may make their approval of a deal (merger, acquisition, joint venture or whatever) conditional on slots being made available to prospective competitors.
So, although there are barriers to entry, regulators may remove or lower them.

Existing EU competition law includes provisions to prevent companies from abusing a dominant position. For airlines this may, for example, limit the incentive schemes an airline has in place with Travel Agents.
So, these ‘barriers’ are effectively lowered.

Most of the ‘barriers’ you list (plan routes, invest on hardware, contracts, hire staff, make marketing campaigns) are simply the normal costs of doing business.
An established airline wanting to enter or grow in the market will be well used to these costs.
Established airlines and ‘wannabe-millionaire-startups’ have to make a judgement as to whether they are likely to get a return on their investment.


The barriers to opening any route (especially a long haul one) are very high if an airline doesn't have a hub at one end of it.
First to fly the 787-9
 
onwFan
Posts: 436
Joined: Wed Feb 03, 2016 4:02 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 6:30 am

zkojq wrote:

onwFan wrote:
FRA will not be what it is without LH’s domination.
CDG will not be what it is without AF’s domination.
MAD is not & cannot be what it can with both Iberia & UX competing. I am talking more along the lines of route diversity. Maybe instead of five daily flights to MAD-EZE, we could have thrice daily MAD-EZE, once daily COR and once daily MDZ? Route aithorities permitting of course.


Nonsense. Fares ex-FRA are sky high thanks to LH's domination. Paris actually has a lot of competition (eg 10 carriers flying PAR-NYC)

In the MAD case, rather than five daily flights MAD-EZE, you'll have three daily flights with much higher fares and worse customer service (since now IAG has to compete much less for everyone's business). Read up on monopolistic behaviour. Corporations exist to make money, not to provide route diversity.


FYI, I was not referring to any route in particular, there are many international routes out of CDG that are monopoly for AF or have only one competitor (e.g. West Africa, Asia, US, Latin America, etc.) which is what a combination of IB/UX will lead to. I was merely commenting on the fact that the market shares that LH and AF enjoy at their major hubs is one of the main reasons for the portfolio of destinations that CDG and FRA enjoy.

As for your comment MAD-EZE, all the major Latin American routes from Spain are going to have competition - it is expected that a combined IB/UX will expand to secondary destinations which other EU carriers will not be well-poised to. If AF/KL buys UX, it is obvious that UX will be reduced to a feeder like they did with AZ. They are not going to prop up MAD at the expense of CDG and AMS, which are already not ideal hubs for EU-Latin America traffic.

On a side note, I distinctly remember that none of your logic in this thread were at play when you expressed your eagerness for LH to swallow up AB and NK two years back :-P
 
User avatar
chunhimlai
Posts: 601
Joined: Wed Jun 03, 2015 11:03 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 6:41 am

Will MAD rebuild T1-T3 once UX move to T4?
 
BA777FO
Posts: 577
Joined: Sun Apr 22, 2018 2:58 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 6:48 am

zkojq wrote:
Indeed. AFKL is the best suitor for IAG and a takeover by them would have minimal effect on competition. Allowing IAG to control 76% of the seats in the Spanish market through the takeover of a profitable competitor who isn't on the verge of bankruptcy is blatantly anti competitive and will lead to price hikes and capacity reduction and fewer employment opportunities.


There is competition on virtually every domestic market in Spain (besides Canaries and Balearics) from high speed rail (AVE) - the railway network has the biggest percentage share of the market too at 53%. The market involves all methods of transport, not just by air. If Iberia raise prices more people will simply travel by rail.

zkojq wrote:
Again, more nonsense. The possibility of competition at some point in the future =/= actual competition.


I'd tone down the "nonsense" if I was you! This is exactly what the EU Commission will be looking at. IAG will have less than 50% of the total domestic transport market taking rail into consideration, in Spain overall IAG with UX will control just 19%. Ryanair has 22% market share of the overall Spanish market and virtually all long haul routes that IB&UX operate face competition from another carrier.

zkojq wrote:
In the MAD case, rather than five daily flights MAD-EZE, you'll have three daily flights with much higher fares and worse customer service (since now IAG has to compete much less for everyone's business). Read up on monopolistic behaviour. Corporations exist to make money, not to provide route diversity.


So you've spoken to the Iberia network planners now and have a crystal ball into the future?!

zkojq wrote:
Because IAG will have even more market power and will capacity dump to keep them out.


Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG? Best break up those monopolies then, huh? Especially given those airlines share a similar or greater percentage share of seats from their respective hubs as IB and UX will at Madrid.
Last edited by BA777FO on Wed Nov 20, 2019 6:56 am, edited 1 time in total.
 
BA777FO
Posts: 577
Joined: Sun Apr 22, 2018 2:58 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 6:55 am

zkojq wrote:
BealineV953 wrote:
YIMBY wrote:

There are huge barriers of entrance for new entrants in any market, particularly to make a major base. Those barriers are commercial. They have to invest on hardware, spend money in negotiations, contracts, etc, hire staff, get slots, plan routes, make marketing campaigns.

While I am sure that some major (e.g. LH, KL) or minor (whatever regional) airlines will try to enter and capture their share, knowing that there is an opportunity when IAG group raises the ticket prices, it will not happen overnight, but may be a year long process. It may be easier for airlines that have experience on it (i.e. LCC's) but not so easy for the wannabe-millionaire-startups. For anyone, it is a great risk, as there may be another similar airline that will do it better.

Of course, just increasing flights to Spain from homebase is relatively easy. Is that enough for EC?

There are also other ways to lower the barrier, like banning the loyalty programs for the dominant player. Would that be doable?


In the economic sense, ‘barriers to entry’ are typically those things that the entrant does not have control over. For airlines this would often include things like:
* Obtaining route licences
* Obtaining landing and take-off slots at slot restricted airports.
* Gaining access to gates

The intra-EU market is deregulated; route licences are not needed.
To markets beyond the EU route licenses are needed. However, the EU has liberal agreements in place with a number of countries, and securing a route licence for those markets is relatively straightforward.
To enable competition, regulators may make their approval of a deal (merger, acquisition, joint venture or whatever) conditional on slots being made available to prospective competitors.
So, although there are barriers to entry, regulators may remove or lower them.

Existing EU competition law includes provisions to prevent companies from abusing a dominant position. For airlines this may, for example, limit the incentive schemes an airline has in place with Travel Agents.
So, these ‘barriers’ are effectively lowered.

Most of the ‘barriers’ you list (plan routes, invest on hardware, contracts, hire staff, make marketing campaigns) are simply the normal costs of doing business.
An established airline wanting to enter or grow in the market will be well used to these costs.
Established airlines and ‘wannabe-millionaire-startups’ have to make a judgement as to whether they are likely to get a return on their investment.


The barriers to opening any route (especially a long haul one) are very high if an airline doesn't have a hub at one end of it.


That hasn't stopped Norwegian. As YIMBY says, the EU will not be looking at the usual cost of doing business. Precedent shows that airlines like Norwegian can and do start routes like that. Furthermore, nothing prevents, say Eurowings, from creating a hub at Madrid. That's the key point.
 
BealineV953
Posts: 187
Joined: Fri Jul 26, 2019 10:00 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 1:08 pm

zkojq wrote:
BealineV953 wrote:
YIMBY wrote:

There are huge barriers of entrance for new entrants in any market, particularly to make a major base. Those barriers are commercial. They have to invest on hardware, spend money in negotiations, contracts, etc, hire staff, get slots, plan routes, make marketing campaigns.

While I am sure that some major (e.g. LH, KL) or minor (whatever regional) airlines will try to enter and capture their share, knowing that there is an opportunity when IAG group raises the ticket prices, it will not happen overnight, but may be a year long process. It may be easier for airlines that have experience on it (i.e. LCC's) but not so easy for the wannabe-millionaire-startups. For anyone, it is a great risk, as there may be another similar airline that will do it better.

Of course, just increasing flights to Spain from homebase is relatively easy. Is that enough for EC?

There are also other ways to lower the barrier, like banning the loyalty programs for the dominant player. Would that be doable?


In the economic sense, ‘barriers to entry’ are typically those things that the entrant does not have control over. For airlines this would often include things like:
* Obtaining route licences
* Obtaining landing and take-off slots at slot restricted airports.
* Gaining access to gates

The intra-EU market is deregulated; route licences are not needed.
To markets beyond the EU route licenses are needed. However, the EU has liberal agreements in place with a number of countries, and securing a route licence for those markets is relatively straightforward.
To enable competition, regulators may make their approval of a deal (merger, acquisition, joint venture or whatever) conditional on slots being made available to prospective competitors.
So, although there are barriers to entry, regulators may remove or lower them.

Existing EU competition law includes provisions to prevent companies from abusing a dominant position. For airlines this may, for example, limit the incentive schemes an airline has in place with Travel Agents.
So, these ‘barriers’ are effectively lowered.

Most of the ‘barriers’ you list (plan routes, invest on hardware, contracts, hire staff, make marketing campaigns) are simply the normal costs of doing business.
An established airline wanting to enter or grow in the market will be well used to these costs.
Established airlines and ‘wannabe-millionaire-startups’ have to make a judgement as to whether they are likely to get a return on their investment.


The barriers to opening any route (especially a long haul one) are very high if an airline doesn't have a hub at one end of it.


No, the barriers to opening any new route are not high if an airline does not have a hub at one end of it, including long-haul.

The EU is pro-consumer. EU competition law seeks to maintain competition and to protect consumers from anti-competitive behavior.

Elsewhere you suggest that IAG will reduce frequency and put up prices.

Economic theory says that if a company makes excess profits, competitors will enter the market.

In economics, excess profit (also called abnormal, supernormal or pure profit) is "profit of a firm over and above what provides its owners with a normal (market equilibrium) return to capital."

Normal profit (return) in turn is defined as opportunity cost of the owner's resources.

According to the theoretical model of perfect competition, excess profits are unsustainable because they stimulate new supply, which forces down prices and eliminates the excess profit.

That is: if IAG does reduce frequency and put up prices other airlines will see an opportunity to enter the market and to make a profit.

If an airline believes it has a compelling offer (better product, value for money prices) then it can be confident of being able to attract customers away from a dominant competitor.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 1:41 pm

BA777FO wrote:
Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG? Best break up those monopolies then, huh? Especially given those airlines share a similar or greater percentage share of seats from their respective hubs as IB and UX will at Madrid.

Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.
 
BA777FO
Posts: 577
Joined: Sun Apr 22, 2018 2:58 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 2:30 pm

Jetty wrote:
BA777FO wrote:
Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG? Best break up those monopolies then, huh? Especially given those airlines share a similar or greater percentage share of seats from their respective hubs as IB and UX will at Madrid.

Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.


Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 2:48 pm

BA777FO wrote:
Jetty wrote:
BA777FO wrote:
Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG? Best break up those monopolies then, huh? Especially given those airlines share a similar or greater percentage share of seats from their respective hubs as IB and UX will at Madrid.

Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.


Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.

You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.
 
BA777FO
Posts: 577
Joined: Sun Apr 22, 2018 2:58 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 3:05 pm

Jetty wrote:
BA777FO wrote:
Jetty wrote:
Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.


Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.

You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.


You must be an EU anti-trust lawyer, I suppose?

We'll see what happens. IAG have done their due dilligence and are essentially convinced there will be no impediment. You have little more than an opinion that goes against prior precedent.

There is significant competition with AVE high speed rail domestically. Non-issue.

European-wide, Ryanair will still have a greater market share than IB & UX combined.

Intercontinentally virtually all long haul routes have competition from another airline aside from a few smaller markets.

Like I said, this'll go through without a hitch.
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 3:20 pm

BA777FO wrote:
Jetty wrote:
BA777FO wrote:

Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.

You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.


You must be an EU anti-trust lawyer, I suppose?

We'll see what happens. IAG have done their due dilligence and are essentially convinced there will be no impediment. You have little more than an opinion that goes against prior precedent.

There is significant competition with AVE high speed rail domestically. Non-issue.

European-wide, Ryanair will still have a greater market share than IB & UX combined.

Intercontinentally virtually all long haul routes have competition from another airline aside from a few smaller markets.

I don’t know enough about the Spanish rail network to be able to tell if that provides meaningful competition on many routes, but it is indeed relevant, as is the intercontinental competition. (But both have nothing to do with KL/AMS or LH/FRA). The main issue will be domestic routes where the train isn’t a practical alternative; nobody is going to take the train from Bilbao to Palma de Majorca and the merger would kill competition on routes like this.
 
OGLOBAL
Posts: 202
Joined: Thu Sep 29, 2016 12:29 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 3:56 pm

i really hope it doesn't go through avios sucks compared to suma
 
BealineV953
Posts: 187
Joined: Fri Jul 26, 2019 10:00 am

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 4:27 pm

Jetty wrote:
BA777FO wrote:
Jetty wrote:
Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.


Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.

You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.


Anti-competitive behaviour is prohibited by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

EU competition law prohibits two main types of anti-competitive activity, one of which is ‘Abuse of a dominant market position’ (under the Article 102 prohibitions). This prohibits businesses with significant market power unfairly exploiting their strong market positions.

To be in a position of dominance, a business must have the ability to act independently of its customers, competitors and consumers. Establishing if a company is dominant requires an assessment of a number of elements but, as a general rule, if a business has a 50% market share there is a presumption that it is dominant. However, dominance has been found to exist where market share is as low as 40%.

Article 102 requires dominance in a “substantial” geographical part of the European Union.
Commission Notice, para 7 says:
“The relevant geographic market comprises the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogenous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas.”

Definition of a dominant position in a substantial part of the internal market:
* The criteria relates to the geographic scope of a finding of dominance
* The relevant geographic market must constitute at least “a substantial part” of the common market
* “For the purpose of determining whether a specific territory is large enough to amount to ‘a substantial part of the common market’ within the meaning of [Article 102] of the Treaty, the pattern and volume of the production and consumption of the said product as well as the habits and economic opportunities of vendors and purchasers must be considered”
* Dominance throughout the EU would qualifies
* Dominance in one Member State would qualifies
* Dominance within parts of a Member State: Article 102 calls for case by case assessment.

All clear? Maybe.

An IAG acquisition of Air Europa will not give the IAG group dominance throughout the EU.
An IAG acquisition of Air Europa would give the IAG group a strong position in Spain. However, the ‘market’ has to be defined. The Spanish domestic is a market, as is Spain to and from the rest of the EU.
* An IAG acquisition of Air Europa would give the IAG group a very strong position in Madrid.


If EU Regulators find that the acquisition will limit competition in some markets, it does not mean that the acquisition must be blocked. Rather, the Regulators may call for conditions that allow competition to continue in the relevant markets.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
User avatar
lesfalls
Posts: 3366
Joined: Fri Dec 06, 2013 11:58 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 4:42 pm

OGLOBAL wrote:
i really hope it doesn't go through avios sucks compared to suma

How is Suma compared to avios?
Lufthansa: Einfach ein bisschen besser.
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 5:26 pm

BealineV953 wrote:
Anti-competitive behaviour is prohibited by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

EU competition law prohibits two main types of anti-competitive activity, one of which is ‘Abuse of a dominant market position’ (under the Article 102 prohibitions). This prohibits businesses with significant market power unfairly exploiting their strong market positions.

You're starting off referring to the wrong regulation which makes the rest of your analysis irrelevant. This is about 'abuse of a dominant market position' while mergers creating a dominant market position and thereby reducing competition aren't allowed even if the resulting dominant market position isn't abused and that is why the comparison with i.e. KL at AMS and LH at FRA fails: different regulations apply to companies that have a dominant market position vis a vis companies that want to create a dominant market position by means of a merger. You need to be looking at the the EC Merger Regulation: https://eur-lex.europa.eu/legal-content ... 32004R0139

To see how it is applied to airline mergers look at the Ryanair/Aer Lingus case i.e. including a route by route analysis: https://ec.europa.eu/competition/merger ... 642_EN.pdf

The Commission concludes that the Transaction is likely to significantly impede effective competition in the internal market or in a substantial part thereof within the meaning of Article 2(3) of the Merger Regulation as a result of the creation of a dominant position of Ryanair and Aer Lingus on 46 routes from and to Dublin, Shannon, Cork and Knock.

All clear? :lol:
 
OGLOBAL
Posts: 202
Joined: Thu Sep 29, 2016 12:29 pm

Re: IAG to buy Air Europa for €1 billion

Wed Nov 20, 2019 10:29 pm

lesfalls wrote:
OGLOBAL wrote:
i really hope it doesn't go through avios sucks compared to suma

How is Suma compared to avios?


your miles don't expire . you have 12 months from the day you signed up or from the day you levelled up with Iberia it's from march no matter what. with suma you need 25 flights to become gold . With IB with 25 flight you become silver .
 
BealineV953
Posts: 187
Joined: Fri Jul 26, 2019 10:00 am

Re: IAG to buy Air Europa for €1 billion

Tue Nov 26, 2019 11:07 am

Jetty wrote:
BealineV953 wrote:
Anti-competitive behaviour is prohibited by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

EU competition law prohibits two main types of anti-competitive activity, one of which is ‘Abuse of a dominant market position’ (under the Article 102 prohibitions). This prohibits businesses with significant market power unfairly exploiting their strong market positions.

You're starting off referring to the wrong regulation which makes the rest of your analysis irrelevant. This is about 'abuse of a dominant market position' while mergers creating a dominant market position and thereby reducing competition aren't allowed even if the resulting dominant market position isn't abused and that is why the comparison with i.e. KL at AMS and LH at FRA fails: different regulations apply to companies that have a dominant market position vis a vis companies that want to create a dominant market position by means of a merger. You need to be looking at the the EC Merger Regulation: https://eur-lex.europa.eu/legal-content ... 32004R0139

To see how it is applied to airline mergers look at the Ryanair/Aer Lingus case i.e. including a route by route analysis: https://ec.europa.eu/competition/merger ... 642_EN.pdf

The Commission concludes that the Transaction is likely to significantly impede effective competition in the internal market or in a substantial part thereof within the meaning of Article 2(3) of the Merger Regulation as a result of the creation of a dominant position of Ryanair and Aer Lingus on 46 routes from and to Dublin, Shannon, Cork and Knock.

All clear? :lol:


Many thanks for this; it is both helpful and interesting.

I worked on airline joint ventures and did some work on airline acquisitions. I did not work on any mergers. When it was first issued I read the EU decision on the proposed Ryanair takeover of Aer Lingus, but confess I did not think of the EC Merger Regulations. I should have read your posts ‘184’, ‘186’ and ‘223’ more carefully.

Where I said “All clear? Maybe” I meant that while EU regulators take great care to craft competition rules, the meaning may become clear only when tested on a case.

My reason for referring to the ‘relevant geographic market’ part of Article 102, albeit the wrong rule, was to highlight that posts along the lines of ‘this is will significantly reduce competition on a lot of routes’ miss the point. Rather, when the rules are applied to the airline industry both where the product is sold and where travel is from and to have to be defined. That is: sold where, and travel between where and where.

There are examples in the Ryanair case. Travel from and to ‘Barcelona’ took account of passengers using all three of Barcelona El Prat, Girona and Reus airports. Similarly Venice and Treviso were treated as one origin and destination.

The proposed IAG acquisition of Air Europa is more complicated than the proposed Ryanair acquisition of Aer Lingus. In particular there are significant flows to and from longhaul destinations. Compared to shorthaul flows, longhaul flows are more likely to involve connections and sale outside the home market.

Stating the obvious, Iberia operates services from Spain to South America and services to many points in Europe. This gives us ‘sold in Spain, travel to South America’ and ‘sold in Europe, travel to South America’.

We can see where IAG is going with this. In its presentation IAG shows its share of the Europe-Latin America market increasing from 19% to 26%. IAG gives the AF/KL plus LATAM (future Skyteam) share as 27%. Looked at that way, a 26% share for IAG is not dominant.

Of course there are other markets to consider, including ‘sold in Spain, travel to South America’, intra-Europe and the Spanish domestic market.

For the intra-Europe and Spanish domestic markets, as the rule you quote says “…the entry of new competitors may be regarded as a competitive constraint which is sufficient to prevent or thwart the potential anti-competitive effects of the concentration.”

I agree, the question here isn't whether is IAG is allowed to acquire Air Europa, but whether the deal is still attractive after any concessions IAG is required to make.

IAG manages expenditure very carefully. It does not rush into things. IAG has confirmed that it will pay a €40-million break fee to Globalia if the transaction does not proceed. This suggests to me that IAG has taken advice and is confident of approval with acceptable conditions.

We will see.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
User avatar
zkojq
Posts: 4314
Joined: Fri Sep 02, 2011 12:42 am

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 4:07 am

IAG’s Purchase of Air Europa is Very Bad For Passengers

If approved by regulators, the deal would give IAG a dominant position in the Spanish air travel market, particularly on long distance flights. IAG already controls Iberia, the dominant player in Madrid, and ultra-low cost carrier (ULCC) Vueling, the dominant player in Barcelona. It also operates LEVEL, a long-haul low-cost airline operating in Barcelona (and Paris Orly). Iberia and Vueling are the two largest airlines in Spain, Air Europa is the third biggest.

Taking Air Europa off the board would dramatically reduce competition across the carrier’s current network. Few if any additional routes will be enabled by the additional bulk of the merged carrier. Instead, it is far more likely that Iberia will draw down much of the Air Europa network (particularly on short haul flights) and consolidate the Madrid hub. In particular, there are three types of passengers who would suffer the most due to the merger; domestic passengers within Spain, travelers from Spain to Latin America, and passengers flying between South America and Europe more broadly.

Combined Carrier Would Have 84% Domestic Marketshare Within Spain
The title above isn’t a typo; Air Europa, Iberia, and Vueling together operate about 84% of the seat capacity in the domestic Spanish market. Looking specifically at Madrid, the merger would create a monopoly on nine domestic routes (red routes in the map below) and reduce competition from three to two carriers on a further three (yellow).


Image

The monopoly markets are primarily domestic business travel markets from Madrid (excluding Fuerteventura and Lanzarote), and while there is high speed rail serving as competition for some of these routes the merger is still likely to push fares upwards substantially. In many of these markets, the two carriers each operate 3+ daily flights, and Iberia is likely to reduce duplicative capacity. On a few routes, the carrier schedules are more dispersed, and in those cases passengers may benefit from additional frequency, though it is likely to be paired with higher fares.

Meanwhile on routes between Madrid and Europe or North Africa. Air Europa flies mostly to major European cities like Rome, Paris, and London, and these routes are more competitive, with European full service carriers and ULCCs alike offering substantial capacity to and from Madrid. However, in many markets, the merger will reduce competition from three carriers down to two. And because Air Europa tended to have lower prices than most European full service carriers, this will still harm passengers on routes to places like Amsterdam, Munich, and Zurich.

The Loss of Air Europa’s Long Haul Network Is Likely to Drive Up Fares
Merging Air Europa’s long haul network into Iberia would be a substantial loss for both origin and destination (O&D) travelers flying between Latin America and Spain, and passengers connecting between South America and Europe. an Air Europa-Iberia merger would create a monopoly on five long haul routes and drop the number of competitors from three to two on an additional four. In these markets, Air Europa is the primary pricing constraint on Iberia – that would disappear post-merger.

Of the remaining 13 long haul routes at Madrid, six are operated exclusively by Air Europa, and seven would retain competition from at least three carriers. However, even in these markets, the merger is likely to have an anticompetitive impact. Of the routes with multiple competitors, Cancun, Havana, and Santa Cruz are only served by leisure carriers who don’t offer meaningful connectivity via Madrid. This harms O&D passengers in those markets traveling to and from the rest of Europe.

At Sao Paulo and Lima meanwhile, LATAM Airlines is the main competitor. The problem with this is that LATAM and IAG are currently pursuing a joint venture between Europe and South America. If said joint venture is approved, both of those markets would drop from three competitors to two, and in each case (Plus Ultra at Lima and Air China at Sao Paulo), the third competitor would operate less than daily flights. Only New York JFK (with multiple competitors at the same airport plus United down the road at Newark) would retain substantial competition, and not suffer any ill effects in terms of onwards connectivity (since there are multiple nonstop and one stop competitors at JFK for every short and medium haul route flown by Air Europa).

From all of these destinations, a secondary competitive challenge is the reduction of competition on one-stop itineraries to Europe. For passengers flying from Latin America to Europa, the two best-positioned hubs are Lisbon (home to TAP Portugal) and Madrid (home to Iberia and Air Europa). An analysis published at airliners.net found that 36% of Air Europa passengers were connecting over Madrid and that the largest connecting traffic flows were between Latin America and Europe. The same flow dominated for TAP Portugal at Lisbon (42% connecting) and Iberia at Madrid (49% connecting). With the merger, IAG will be able to eliminate one of the two main competitors for this traffic flow, which is likely to push up one-stop fares substantially.


https://www.travelcodex.com/iags-purcha ... assengers/


BA777FO wrote:
There is competition on virtually every domestic market in Spain (besides Canaries and Balearics) from high speed rail (AVE) - the railway network has the biggest percentage share of the market too at 53%. The market involves all methods of transport, not just by air. If Iberia raise prices more people will simply travel by rail.

You're comparing apples and oranges. IAG would have 84% domestic market share within Spain.

BA777FO wrote:
I'd tone down the "nonsense" if I was you! This is exactly what the EU Commission will be looking at. IAG will have less than 50% of the total domestic transport market taking rail into consideration, in Spain overall IAG with UX will control just 19%. Ryanair has 22% market share of the overall Spanish market and virtually all long haul routes that IB&UX operate face competition from another carrier.

Multiple monopoly routes will not impress the EC.

BA777FO wrote:
So you've spoken to the Iberia network planners now and have a crystal ball into the future?!

Oh right, my mistake. IB-UX will roll out the red carpet for Plus Ultra and do their best to help out their competitor, the route planners will give Plus Ultra six months notice of all schedule changes, just to be fair. :roll:

BA777FO wrote:
Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG?

Plus Ultra has four aircraft. Condor, based in FRA, has 17 long haul aircraft. In PAR, Corsair has 7, Air Carribes 10, XL Airways (until a month ago) 4, Level France 3, French Bee 3. And like I pointed out above, PAR-NYC has nine airlines competing with one and other.


BA777FO wrote:
Best break up those monopolies then, huh?

Consumers would benefit greatly from this.

BA777FO wrote:
That hasn't stopped Norwegian.


Hows that working out for them, profitability wise?

BealineV953 wrote:
Elsewhere you suggest that IAG will reduce frequency and put up prices.

Economic theory says that if a company makes excess profits, competitors will enter the market.


And once a competitor enters the market, IAG will lower prices dramatically, dumping capacity to make sure their competition is short lived.

Jetty wrote:
BA777FO wrote:
Just like Lufthansa would do out of Frankfurt or KLM out of AMS or AF out of CDG? Best break up those monopolies then, huh? Especially given those airlines share a similar or greater percentage share of seats from their respective hubs as IB and UX will at Madrid.

Apples and oranges. Different rules apply to proposed mergers than to existing companies. So it’s very possible that a certain market concentration doesn’t lead to a break up, but wouldn’t be allowed to exist by means of a merger.

:checkmark:

BealineV953 wrote:
Jetty wrote:
BA777FO wrote:

Not really - this merger will be compared to the likes of Lufthansa at FRA, BA at LHR and KLM at AMS. IB's market share in MAD is no greater than their European counterparts at their respective hubs and therefore besides perhaps at most a few route carveouts I doubt there'll be any objection from the EU Commission.

You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.


Anti-competitive behaviour is prohibited by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

EU competition law prohibits two main types of anti-competitive activity, one of which is ‘Abuse of a dominant market position’ (under the Article 102 prohibitions). This prohibits businesses with significant market power unfairly exploiting their strong market positions.


So we can assume that Austrian will be prosecuted for dumping capacity to try and keep out Wizzair and Laudamotion from Vienna? Unfortunately whilst consumer authorities are generally good at preventing mergers that substantially reduce competition, prosecuting companies for capacity dumping is very difficult and thus rare. And that's globally, not just in the EU.
First to fly the 787-9
 
User avatar
zkojq
Posts: 4314
Joined: Fri Sep 02, 2011 12:42 am

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 4:49 am

onwFan wrote:
On a side note, I distinctly remember that none of your logic in this thread were at play when you expressed your eagerness for LH to swallow up AB and NK two years back :-P


I was very clear that both LH/AB and BA/BD were only acceptable with the view to prevent job losses:

zkojq wrote:
Allowing IAG to control 76% of the seats in the Spanish market through the takeover of a profitable competitor who isn't on the verge of bankruptcy is blatantly anti competitive and will lead to price hikes and capacity reduction and fewer employment opportunities.


onwFan wrote:
As for your comment MAD-EZE, all the major Latin American routes from Spain are going to have competition - it is expected that a combined IB/UX will expand to secondary destinations which other EU carriers will not be well-poised to. If AF/KL buys UX, it is obvious that UX will be reduced to a feeder like they did with AZ. They are not going to prop up MAD at the expense of CDG and AMS, which are already not ideal hubs for EU-Latin America traffic.

Alitalia's contraction is relatively minimal and has everything to do with the airline being unprofitable, rather than traffic being funneled through AMS/CDG. UX is profitable and with a lower cost base than AF or KL it is likely for the opposite to happen, with traffic being funneled through MAD by AF and KL.
First to fly the 787-9
 
Detroit313
Posts: 544
Joined: Thu Dec 14, 2017 2:56 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 5:01 am

Good luck to IAG! This is great news for Madrid and the One World alliance!

Paris and AMS are controlled by one airline. It is only fair to let IAG increase its share in Madrid.
 
User avatar
thekorean
Posts: 1796
Joined: Mon Dec 05, 2011 9:05 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 5:18 am

Detroit313 wrote:
Good luck to IAG! This is great news for Madrid and the One World alliance!

Paris and AMS are controlled by one airline. It is only fair to let IAG increase its share in Madrid.

No it isn’t.
 
Detroit313
Posts: 544
Joined: Thu Dec 14, 2017 2:56 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 7:21 am

thekorean wrote:
Detroit313 wrote:
Good luck to IAG! This is great news for Madrid and the One World alliance!

Paris and AMS are controlled by one airline. It is only fair to let IAG increase its share in Madrid.

No it isn’t.


Yes, it is.
 
SCQ83
Posts: 5752
Joined: Wed Oct 03, 2012 8:32 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 7:54 am

Jetty wrote:
BA777FO wrote:
Jetty wrote:
You apparently don’t know much about EU antitrust laws; comparisons with other airlines are totally irrelevant. The thing that matters is if there is a significant impediment of effective competition due to the merger, and not on an European level but on a local level or even individual routes. That is the test even if there would be no effective competition in some other EU countries.


You must be an EU anti-trust lawyer, I suppose?

We'll see what happens. IAG have done their due dilligence and are essentially convinced there will be no impediment. You have little more than an opinion that goes against prior precedent.

There is significant competition with AVE high speed rail domestically. Non-issue.

European-wide, Ryanair will still have a greater market share than IB & UX combined.

Intercontinentally virtually all long haul routes have competition from another airline aside from a few smaller markets.

I don’t know enough about the Spanish rail network to be able to tell if that provides meaningful competition on many routes, but it is indeed relevant, as is the intercontinental competition. (But both have nothing to do with KL/AMS or LH/FRA). The main issue will be domestic routes where the train isn’t a practical alternative; nobody is going to take the train from Bilbao to Palma de Majorca and the merger would kill competition on routes like this.


Train is not only relevant; it is the critical point.

In 5 years max every other airport in the mainland will be connected to Madrid in less than 3 hours. Nobody flies today Madrid-Valencia or Madrid-Alicante other than connecting (2 hours or less by train) so the concept of having air competition in that route is irrelevant. Madrid-Valencia competes with other EU hubs (VLC-FRA, VLC-LIS). If there was any doubt, the current anti-plane trends (pollution) will only help.

As for non-Madrid domestic routes, this doesn’t change a lot. Ryanair is the biggest airline in those routes, competing with Vueling. In the case of BIO (only major airport in Spain with no Ryanair) there is Volotea. And even Norwegian tried something like BCN-BIO and dropped it.

As for intercontinental; not having two carriers in something like Montevideo is not going to have an impact in 99.99% of Spain’s population. Some comments above (like Melilla-Málaga) are hilarious.
 
tobsw
Posts: 136
Joined: Mon Jul 11, 2011 2:29 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 8:29 am

The main concerns are:

-Spanish islands (Balearics and especially Canary Islands).
-North Spanish airports. There's no alternative NOW. It may be in 5 years the high speed train is up and running. But it's not now. Competition authorities will look how it is now.

Everything else is less problematic. There will be some problematic European routes, like Venice.

In long haul... Miami, Panama, Costa Rica, Uruguay will be router where there's competition now but won't be after the merger.

Luis Gallego has accepted competition authorities will request concessions. The key here is whether IB and IAG are going to accept them.

What I don't know is... Let's say the EC says IB is allowed to buy UX but they need to sell off their domestic operations. What if they dont find any interested groups/airlines in that segment? Anyone with some experience?
 
SKAirbus
Posts: 1545
Joined: Sat Oct 27, 2007 9:18 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 8:31 am

I hope that the EU stop this in its tracks. Lufthansa being allowed to buy up all its competition in Northern and Central Europe has led to very noncompetitive conditions with routes such as BRU-FRA, BRU-MUC, BRU-ZRH and BRU-VIE only being flown by LH Group airlines. I'm often quoted €400 + for a return in Economy for these - once I had to pay €800 to ZRH. If the same is allowed to happen in Spain, it is very bad for the consumer.
Base: BRU
 
SCQ83
Posts: 5752
Joined: Wed Oct 03, 2012 8:32 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 9:00 am

tobsw wrote:
The main concerns are:

-North Spanish airports. There's no alternative NOW. It may be in 5 years the high speed train is up and running. But it's not now. Competition authorities will look how it is now.?


Northern Spain is not an issue today:

- Some major cities already don’t have Air Europa to Madrid: Santiago, Santander, San Sebastián or Pamplona.

- Air Europa and Iberia only compete in LCG, VGO, OVD and BIO.

- Air Europa restarted OVD only last year. High speed train will be completed to Oviedo in 2020.

- High speed train will reach A Coruña and Vigo by 2021 the latest.

- Bilbao will be reached a bit later but plenty of competition to other hubs.

And again, having two carriers to Madrid is not an obligation. As I said in a previous message, BCN-BIO (700k passengers/year and uncompetitive train) has only Vueling after Norwegian left the route. If a route has no competition because there no other carrier is interested, there is not much that any government can do.
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 9:15 am

Northern Spain is an issue. BIO-PMI i.e. And that’s just a quick look, there are probably more.

Alternatives have to be feasible and not only theoretical: no one wants to transfer when a short direct flight is available. Intercontinental transfer flights do provide meaningful competition.
 
SCQ83
Posts: 5752
Joined: Wed Oct 03, 2012 8:32 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 9:29 am

Jetty wrote:
Northern Spain is an issue. BIO-PMI i.e. And that’s just a quick look, there are probably more.

Alternatives have to be feasible and not only theoretical: no one wants to transfer when a short direct flight is available. Intercontinental transfer flights do provide meaningful competition.


That is not an issue.

BIO-PMI is flown by Vueling, Air Europa and Volotea. Even after the acquisition, there will be competition (Volotea). Realistically, Ryanair or Norwegian could open it.

I repeat myself, BCN-BIO (a key domestic route) has no competition.

Again having two or more carriers in a route is not a right. BIO-BCN or MAD-SCL are a non-stop monopoly and there is not much anyone can do if there is no other carrier interested
 
tobsw
Posts: 136
Joined: Mon Jul 11, 2011 2:29 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 9:32 am

SCQ83 wrote:
And again, having two carriers to Madrid is not an obligation. As I said in a previous message, BCN-BIO (700k passengers/year and uncompetitive train) has only Vueling after Norwegian left the route. If a route has no competition because there no other carrier is interested, there is not much that any government can do.


That's not the point of the analysis. That's called "tried to compete but failed" - and when you fail to compete (in this case Norwegian), you retreat. The same way Vueling is retreating from Rome Fiumicino.

The issue that matter is related to whether there's competition now, and whether there will be competition after the acquisition.

The EC has blocked acquisition and mergers in the past. Ryanair vs Aer Lingus (TWICE!) and Aegean and Olympic (ONCE!).

The EC only allowed the Aegean and Olympic merger once they realised that Olympics finances weren't good for them to continue operating independently.
 
Jetty
Posts: 1286
Joined: Wed Nov 11, 2015 12:27 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 10:04 am

SCQ83 wrote:
BIO-PMI is flown by Vueling, Air Europa and Volotea. Even after the acquisition, there will be competition (Volotea). Realistically, Ryanair or Norwegian could open it.

Volotea flies seasonal 2 weekly, that isn’t meaningful competition. Of course there are always airlines that could open a route to provide competition, but it doesn’t only have to be realistic, it has to be expected.

I repeat myself, BCN-BIO (a key domestic route) has no competition.

That’s irrelevant. No competition on one route doesn’t mean the EC will allow no competition on other routes.

Again having two or more carriers in a route is not a right. BIO-BCN or MAD-SCL are a non-stop monopoly and there is not much anyone can do if there is no other carrier interested.

As you say: nothing you can do. However if you have to decide whether or not to allow a merger, there IS something you can do to prevent a monopoly.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 11:49 am

You can find routes where prices went up post consolidation, however in general this has been a good thing. A lot of airlines would not be around anymore if this didn’t happen, then who is better off?
Air Europa are a little different as they seemed to be doing ok on their own for the moment but I can’t see this getting blocked personally. Maybe a few adjustments have to be made to satisfy the regulators but I would expect this to go through.
 
User avatar
DL747400
Posts: 956
Joined: Mon Sep 01, 2008 4:04 pm

Re: IAG to buy Air Europa for €1 billion

Tue Dec 10, 2019 1:59 pm

Not quite a fair argument to compare the Spanish air travel to France or the Netherlands.

CDG and AMS are each significantly larger markets that either MAD or BCN. And while the Spanish market overall is smaller versus France or the Netherlands, allowing IAG to control a greater percentage of traffic at MAD is a significant risk to both current and future competition. I tend to agree with those who say that the EU should carefully review this proposed deal, as it does not appear to be in the best interest of either present or future consumers.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
SCQ83
Posts: 5752
Joined: Wed Oct 03, 2012 8:32 pm

Re: IAG to buy Air Europa for €1 billion

Wed Dec 11, 2019 8:37 pm

DL747400 wrote:
Not quite a fair argument to compare the Spanish air travel to France or the Netherlands.

CDG and AMS are each significantly larger markets that either MAD or BCN.


Spain is also a substantially different market in the way that geographically passengers are much more spread out, so they rely far less in Madrid.

Netherlands

1 Amsterdam 70,956,594
2 Eindhoven 6,237,755


France

1 Paris Charles de Gaulle 72,229,723
2 Paris Orly 33,120,685
3 Nice 13,850,561
4 Lyon Saint Exupéry 11,037,698
5 Toulouse Blagnac 9,630,308
6 Marseille Marseille 9,390,371
7 Bâle Mulhouse 8,573,705
8 Bordeaux Mérignac 6,799,572
9 Nantes Nantes 6,199,181
10 Beauvais Beauvais 3,787,086


Spain

1 Madrid 57,891,340
2 Barcelona 50,172,457
3 Palma De Mallorca 29,081,787
4 Málaga 19,021,784
5 Alicante 13,981,320
6 Gran Canaria 13,573,242
7 Tenerife South 11,042,481
8 Ibiza 8,104,316
9 Valencia 7,769,867
10 Lanzarote 7,327,019


In France there is nothing remotely similar to BCN with 50M PAX, a hub (Vueling), the US3, ME3, etc. flying there. Not to even mention the Netherlands. But not only Barcelona, the other remaining Top 8 airports in Spain are much busier than the other Top 8 ex-Paris in France. Alicante would be France's busiest airport outside Paris if it was in France.
 
SCQ83
Posts: 5752
Joined: Wed Oct 03, 2012 8:32 pm

Re: IAG to buy Air Europa for €1 billion

Thu Dec 12, 2019 7:32 am

SKAirbus wrote:
I hope that the EU stop this in its tracks. Lufthansa being allowed to buy up all its competition in Northern and Central Europe has led to very noncompetitive conditions with routes such as BRU-FRA, BRU-MUC, BRU-ZRH and BRU-VIE only being flown by LH Group airlines. I'm often quoted €400 + for a return in Economy for these - once I had to pay €800 to ZRH. If the same is allowed to happen in Spain, it is very bad for the consumer.


Air Europa + IAG will no lead to any of those monopolies that for some reason some posters here insist on. E.g. MAD-BRU is currently flown by Air Europa, Iberia, Brussels and Ryanair. So with the merge there will be still 3 carriers competing among them.

Domestically it is not an issue either because there is high-speed train to Madrid or competitors (Ryanair, Volotea, Air Nostrum - which is not part of IAG -) in domestic non-Madrid routes.

Most of the comments here show quite a bad understanding of the market in Spain. Air Europa is quite a “marginal” player very focused on Spain/EU connections to MAD to feed their LATAM network. On point-to-point traffic (intra-Spanish, Spain-EU) are a minor player.

For instance an hypothetical merge between IAG and Ryanair would be way trickier in terms of competition (since Ryanair is a bigger carrier than Air Europa in Spain).
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos