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  HOME | Business & Economy (Click here for more)

EC Concerned by Lufthansa’s Monopoly Risk If Air Berlin Purchase Goes Ahead

BRUSSELS – The European Union’s Competition Commissioner expressed on Friday the European Commission’s deep concern that German airline Lufthansa is currently at risk of exerting a de-facto monopoly on a significant number of air-routes if it goes ahead with its planned acquisition of former German airline and competitor, Air Berlin.

Last week the European Commission decided to delay its decision whether to authorize the acquisition until Dec 21, once Lufthansa has put on the negotiation table whatever measures it intends to propose remedial actions to Brussels concerns.

European Commissioner Margrethe Vestager stated in Brussels that “We have quite deep competition concerns” speaking at a press conference and added, “There is a risk that Lufthansa becomes a monopoly, on a significant number of routes.”

Vestager said that the EC was evaluating a market’s test before pronouncing itself on this matter but stressed that the manner the operation has been engineered results “problematic” creating a lot of uncertainty among both passengers and staff.

Vestager reminded that when Air Berlin declared itself insolvent last August, it received various offers and Brussels, back then, warned the airliner that accepting Lufthansa’s offer risked creating a monopoly problem.

Vestager added that the EC has done “what it can” to avoid passengers from suffering the consequences and specified that had already authorized Lufthansa to operate 42 of Air Berlin’s 57 aircraft fleet to guarantee European citizens travel rights.

Vestager also warned that “We can take a number of different decisions, also based on the outcome of the market test.”

The Commissioner added it was important for German and Austrian passengers to have a choice and that businesses must compete to keep prices down” and added “Because of course, the risk of monopolies is that prices go up.”

On Oct. 12, the Lufthansa group decided to acquire a large tranche of Air Berlin for 210 million euros, also announcing it would invest 1.5 billion euros in the defunct airliner.

 

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