IP/09/1065
Brussels, 1 st July 2009
Mergers: Commission opens in-depth investigation into proposed takeover of Austrian Airlines by Lufthansa
The European Commission has opened an in-depth investigation under the EU Merger Regulation into the planned acquisition of Austrian Airlines by Lufthansa of Germany. The Commission’s initial investigation indicated that the proposed acquisition could, on certain routes, give rise to reduced choice of airline services for passengers and the likelihood of higher fares and that there are therefore serious doubts as to the proposed takeover's compatibility with the Single Market in the absence of appropriate remedies. The decision to open an in-depth inquiry does not prejudge the final result of the merger investigation.
Competition Commissioner Neelie Kroes said “The Commission has decided to open an in-depth merger investigation into Lufthansa's takeover of Austrian Airlines because it has serious concerns that the result for passengers could be higher prices or reduced services on certain routes. It is essential that airline consolidation does not deprive consumers of a choice of airlines, competitive prices and other benefits of liberalisation of air transport in the EU. I hope that, in a spirit of mutual cooperation, we will be able to work closely with Lufthansa in the coming weeks to find timely solutions to these concerns.”
Lufthansa is the largest German airline with hubs at Frankfurt and Munich airports. Lufthansa also controls Swiss, based at Zurich airport, Air Dolomiti, Eurowings and low-cost carrier Germanwings. As a leading member of the Star Alliance, it also cooperates closely with a number of other airlines. Lufthansa's proposals to acquire British Midland and Brussels Airlines were cleared by the Commission on 14 May 2009 (see IP/09/789 ) and on 22 June 2009 (see IP/09/974 ), respectively. Austrian Airlines is Austria’s largest airline with its principal hub in Vienna. It is a full-service air carrier. Its subsidiaries include Lauda Air and Tyrolean Airways.
The Commission’s initial investigation found that the proposed transaction would lead to competition concerns with respect to inter alia the routes from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels.
Lufthansa proposed remedies but the Commission found that these remedies, while reducing significantly the number of problems, were not sufficient to allow the merger to be cleared at this point in time. The Commission will continue to work closely with Lufthansa to resolve the outstanding issues as quickly as possible.
The Commission is still considering state support for Austrian Airlines in the framework of a separate investigation under EC Treaty state aid rules.
More information on the merger case is available at:
http://ec.europa.eu/competition/mergers/cases/index/m108.html#m_5440