By Foo Yun Chee
BRUSSELS (Reuters) – EU antitrust regulators on Friday warned that British Airways owner IAG’s bid to secure full control of Air Europa may reduce competition and lead to price increases.
The European Commission singled out the impact on Spanish domestic routes and short-haul and long-haul routes in a statement of objections to the companies, confirming a Reuters story earlier this month.
“The Commission is concerned that customers may face increased prices and/or decreased quality of services after the transaction,” the EU competition watchdog said in a statement.
IAG, which also owns Spanish carrier Iberia, is prepared to give up more than 40% of Air Europa’s 2023 flights to other airlines to address the European Commission’s concerns, IAG CEO Luis Gallego said in a statement.
“Likewise, we commit to ensuring that no route is operated exclusively by Iberia and Air Europa. We remain committed to closing this transaction as quickly as possible in 2024,” he added.
A person with direct knowledge of the matter said earlier that IAG was also ready to give feeder traffic, slots, planes, crew, maintenance, ground handling and existing customer bookings on all divested routes to rivals.
It is also prepared to give rivals acquiring its long-haul routes access to feeder traffic in Europe, the person said.
The package is the one submitted to the Commission in February but now modified with more capacity to be divested and other additions, the source said.
The Commission said IAG could submit remedies at any time of the proceedings until the remedy deadline, which is currently set for June 10 this year.
Air Europa, headquartered in Spain, and its wholly owned subsidiaries, constitute the airline division of Spanish tourism company Globalia.
(Reporting by Foo Yun Chee; Editing by Sudip Kar-Gupta/Benoit Van Overstraeten)
