18 FEBRUARY 2019
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The bid by Air France-KLM to acquire 31% of Virgin Atlantic was approved last week by the European Commission (EC), clearing the deal of competition concerns. Delta Air Lines already owns 49% of Virgin with Virgin Group controlling the remaining 20%.
The EC said it found no concerns with the purchase under the EU Merger Regulation after considering whether the deal would limit competition in the market, even though it acknowledged it would produce overlaps on some direct and indirect flights.
The commission noted this applied mainly on routes between the UK and North America, Africa, Asia and the Caribbean and between continental Europe, Ireland and North America but said this would not raise competition concerns.
This was because the four airlines involved were not close competitors and they continued to face “significant competition from other carriers” on these routes. The EC said it was also unlikely the combined slot portfolio would have a negative effect on passengers at Heathrow and Manchester.
The EC investigation covered the potential effect of the Air France-KLM deal on the market for passenger flights, cargo air transport services, and maintenance, repair and overhaul (MRO) services.
All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum
David Starkie, London
With a notable degree of overlap flagged by the Commission, I find it difficult to believe that the deal would not limit competition. The trans-Atlantic market was already fairly concentrated and as a result will become more so. Question: with 80% shareholding with Delta-AF-KLM, can VS remain on the UK register?