EU's New Antitrust Commissioner to Strengthen Airline Merger Rules

DALLAS — The EU's new antitrust commissioner, Didier Reynders, has announced plans to tighten the rules for airline mergers The aim is to promote fair competition in the industry and address concerns about previous slot concessions not being effective.

As part of the new rules, airlines will be required to allocate valuable airport slots to rivals on routes where there are competition concerns. This measure aims to ensure that competing airlines have access to slots at airports, thereby promoting fair competition and preventing dominant airlines from controlling all the slots.

The EU will also assess proposed transactions to ensure they do not negatively affect competition on domestic, short-haul, and long-haul routes. However, there is no information on specific changes to EU ownership rules.

Divestment of Non-Core Assets

In addition to slot allocation, airlines may also be asked to divest non-core assets as part of the merger approval process This requirement aims to prevent airlines from gaining excessive market power through mergers and acquisitions by divesting assets that are not directly related to their core operations.

During his first interview as commissioner for competition, Reynders expressed that certain remedies, such as slot allocation, have proven to be inefficient. He emphasized the need for regulators to explore alternative concessions from airlines, such as asset divestment, if slot allocation alone is insufficient.

Reynders acknowledged that while slot allocation was previously seen as a satisfactory solution, the desired results may not have been achieved.

According to Frontier Economics, the pandemic muddied the waters of EU competition policy for the airline sector, increasing the challenges that prospective merging parties may face.

Featured image: Frankfurt Airport