Monday, January 23, 2012

Do UK Competition Authorities Need to Scrutinize IAG Purchase of BMI?

Last month International Airline Group (IAG), the parent company of British Airways and Spanish carrier Iberia reached an agreement with Lufthansa to acquire British Midland International (BMI). While the merger has to be approved by European Commission (EC) competition authorities, Virgin Atlantic, which made an unsuccessful bid for BMI, is pushing for British regulators to examine the effects of the deal on the UK domestic market as well. See Rob Gill, Virgin Atlantic Pleads for UK Authorities to Probe BA-BMI Deal, Air & Business Travel News, Jan. 16, 2012 (available here). The primary concern is that, if approved, the merger would increase IAG's control of slots at Heathrow airport from 44% to 53%. IAG has said it intends to use the new slots for long-haul routes, which would imply the merger is more likely to affect international rather than domestic markets, making EC regulators a greater obstacle than any potential review by UK regulators.

http://lawprofessors.typepad.com/aviation/2012/01/do-uk-competition-authorities-need-to-scrutinize-iag-purchase-of-bmi.html

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