EU to tighten rules for airline mergers | Airlines

Regulators in Brussels will seek tougher concessions from airlines looking to merge in order to ensure fair competition, the new EU antitrust commissioner Didier Reynders has said.

Airlines typically offer to give up valuable airport take-off and landing slot concessions to rivals to clear the way for deals. But there is evidence that these concessions have not always worked for previous deals, with some slots not taken up or not used on the routes originally planned.

Brussels will now ask airlines to ensure slots are allocated to rivals on routes with competition concerns. In some cases, airlines may also be asked to sell assets not core to their passenger business to gain clearance.

In his first interview since becoming commissioner for competition, Reynders told the Financial Times: “We see some remedies are not efficient. In the past, the main request [to airlines] was to ask [to offer] slots to other companies.”

But he said that if it were “impossible and not enough”, regulators needed to seek other concessions from airlines, such as forcing them to sell assets.

“Some years ago, we were sure the slots solution was fine. Maybe the results are not there,” added Reynders, who is caretaker commissioner while Margrethe Vestager is on unpaid leave to run for president of the European Investment Bank.

His comments coincide with a wave of consolidation in the European airline industry following the disruption of the pandemic.

One antitrust lawyer said the Commission had changed the way it looked at airline mergers since the pandemic because of “skepticism” over the old system.

The Commission could insist on the disposal of assets that would “directly support the entry and viability” of a competitor. The assets could range from planes to cargo businesses or contracts with airport ground handlers.

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