IAG and Norwegian

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  • transtraxman

    For those who do not have access to The Times and The Financial Times, this article writes about the same.
    “Competition investigation opens into transatlantic route agreement,” (RoutesOnline 11th Oct.)


    One particularly relevant part of the article states, “As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the Competition and Markets Authority (CMA) said it has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments.”

    Is not the CMA getting ahead of itself? The original EU enquiry into the joint venture gave it a (renewable) life span of ten years which runs out in 2020. Also it should be pointed out that the UK is still inside the EU.

    Furthermore, as CANUCKLAD points out the enquiry should not exclude other joint ventures — the Lufthansa group/ Star Alliance, the Air France/KLM /SkyTeam groupings. These however, are outside the remit of the UK authorities so cannot be looked into. That makes the enquiry rather one sided and discriminatory. On the other hand the Delta/Virgin Atlantic joint venture is within a UK remit but it has not been mentioned. Should it not be included? I do not know whether the joint ventures are beneficial to the customer or not. Others can decide that but at least it should be fair in its approach. This would call for the co-operation of the US authorities to look at all the joint ventures not just one.

    As the Times and Financial Times point out this seems to be a maneuver to stop any takeover of Norwegian by IAG with rather a narrow approach.As I remember from one article about a possible merger IAG plus Norwegian is roughly equivalent in size to the whole Lufthansa group. That would make such a merger beneficial?


    As the Times and Financial Times point out this seems to be a maneuver to stop any takeover of Norwegian by IAG with rather a narrow approach

    Transtraxman, your last post raises more questions to consider…

    1) The Virgin /Delta hook up is a close as 2 coats of paint to the BA/AA agreement so should be included.

    However — If you look at how the EU has allowed these ex-state carriers to create these amalgamations to occur then the CMA has got to be very careful how they leave both BA and VS post Brexit.

    To the detriment of smaller airlines and by way of extension us as consumers, the EU has created 3 monolithic cartels in IAG, LHG and AF/KL ? .

    IMO , IAG is by far the weakest , because BA is deemed to be weakest, add to that its other 2 “state” carriers are on the fringes of the EU power base.

    AF/KL …… Paris will stand steadfast behind AF allowing them to mismanage with obstinate blindness, regardless of the damage it’s doing to its less partner. And I mean at both corporate and government level . When the Republic shouts those in The Hague jump. Especially if the message is delivered via Brussels.

    LHG—-By far the strongest and not unsurprisingly, again its Frankfurt that drives the LH group. How is it possible that one airline pretty much monopolises the German speaking population of Europe ? That can’t be right.

    Taking that into account, post Brexit (hopefully) the UK regulators will not leave Virgin and BA at a commercial disadvantage to the protected ex state carriers on the continent.


    Not in a long time have I read such a good anlysis of the airline market in Europe as CANUCKLAD has.However, there are points to be made.

    “the CMA has got to be very careful how they leave both BA and VS post Brexit.” As I tried to make clear in my piece the CMA has to look at the bigger picture and not accept that the UK – US market is the predominating one. Now we are in an European one where flights from any city of over one million inhabitants (at least) should be taken into consideration. (if we talk about Norwegian then accept that it flies from multiple airports in Europe so should be judged in the bigger picture of Europe and not just the UK.)

    The LH group encompases a German airline (Frankfurt and Munich), a Swiss airline (Zurich), an Austrian airline (Vienna), a Belgian airline (Brussels)on top of which there is the European airline Eurowings(from multiple airports).

    The SkyTeam alliance plus the Delta/Virgin Atlantic alliance covers at least Paris CDG, Amsterdam, London Heathrow and London Gatwick more than others.

    Canucklad, as you say, there are many things which show that the authorities in Brussels do not necessarily follow the norms of “good governance”. For me that means we should play the same game to our advantage.As you sum up in your last paragraph we should look after our own as much as others do.

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