Brussels investigates Air Europa takeover

European Commission fears Iberia takeover could reduce competition

1 min
Air Europa has been one of the companies that has received aid.

The European Commission announced Tuesday that it has opened an in-depth investigation to examine Iberia's takeover of Air Europa over suspicions that the deal could reduce competition on 70 domestic and international routes to and from Spain. "We will carefully examine whether the proposed transaction would adversely affect competition on domestic routes, which could lead to higher prices and lower quality for travelers", said the vice president for competition of the EU executive, Margrethe Vestager.

The Danish believes that although "the financial situation of many airlines is still fragile", there are "signs" that "demand for air transport services is recovering from the crisis". It is therefore "important to ensure that the recovery of the sector takes place in a competitive environment that preserves sufficient choice for travellers".

The EU executive could have already given the go-ahead to the operation, but has launched the investigation because of "concerns" that the purchase of Air Europa "may significantly reduce competition" on flights where the two airlines now overlap.

In addition, Brussels Competition services suspect that the acquisition by Iberia could affect those routes where other rival airlines rely on Air Europa's domestic and short-haul network for their own operations at Madrid airport or elsewhere. Iberia closed the purchase of Air Europa for 500 million euros last January.