Navigation path

Left navigation

Additional tools

Other available languages: FR DE NL

IP/08/1995

Brussels, 17 December 2008

Mergers: Commission clears proposed take-over of Martinair by KLM

The European Commission has approved under the EU Merger Regulation the proposed acquisition of Martinair by KLM, both Dutch airlines active in the transport of passengers and cargo. In September 2008 (see IP/08/1300), the Commission opened an in-depth-investigation because of concerns regarding the potential impact of the proposed transaction on passenger transport in particular between Amsterdam and Curacao and Aruba (in the Dutch Antilles). The in-depth investigation, including a consumer survey at Amsterdam airport, showed that the transaction would have only a limited market impact. The Commission therefore concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or in a substantial part of it.

Competition Commissioner Neelie Kroes said "In this case I was very conscious of the need to safeguard the interests of consumers flying to long-haul holiday destinations. After a thorough investigation, I am now satisfied that consumers will continue to have a competitive choice of airline services after the acquisition of Martinair by KLM".

KLM is a full-service air carrier with its home base at Amsterdam's Schiphol Airport. KLM is part of the Air France-KLM group. Martinair is also based at Schiphol and is currently owned 50/50 by KLM and the sea and land transport company Maersk. Both parties are active in air transport of cargo and passengers between Amsterdam and various destinations worldwide.

Martinair's passenger fleet only serves intercontinental destinations. The parties' passenger operations overlap mainly on routes connecting Amsterdam to various long-haul destinations, namely Vancouver, Toronto, Miami, Havana, Punta Cana, Cancun, Curacao and Aruba.

On 8 September 2008, the Commission opened an in-depth inquiry (see IP/08/1300) because of concerns related in particular to the impact that the transaction could have on passenger transport between Amsterdam and Curacao and Aruba.

The Commission's in-depth investigation has shown that the effects of the proposed transaction would be limited, not only because KLM already jointly controls Martinair, but also because Martinair's competitive strength has been constantly decreasing and, to regain its strength, Martinair depends on KLM's agreement to a renewal of its long-haul passenger fleet.

The Commission's in-depth investigation included a consumer survey carried out at Schiphol Airport (Amsterdam). The survey indicated that a significant proportion of passengers would either not travel at all or travel elsewhere if there were a sustained price increase for flights to these two destinations, which limits the potential for price increases.

The Commission's in-depth investigation also revealed that the merged entity would be constrained by its competitor ArkeFly on these two routes. As a result, any price increases on the part of the merged entity would be likely to be unprofitable.

As regards the wholesale supply of airline seats to tour operators for these two routes, any potential price increases by the merged entity would lead to TUI, the tour operator vertically integrated with competitor ArkeFly selling more package holidays to the detriment of its competitors who largely depend on KLM and Martinair for the supply of airline seats for package holidays to Aruba and Curacao. The parties would therefore stand to lose significant sales, making price increases unprofitable.

The Commission also assessed the possible effects of the proposed concentration on other routes where the parties' passenger operations overlap and in the cargo air transport sector. However, the Commission concluded that the proposed transaction was not likely to give rise to any competition concerns in these areas.

More information on the case is available at

http://ec.europa.eu/comm/competition/mergers/cases/index/m102.html#m_5141


Side Bar