Commission approves Etihad's acquisition of joint control over Alitalia, subject to conditions:
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control over New Alitalia of Italy by Alitalia Compagnia Aerea Italiana S.p.A. ("Alitalia CAI") of Italy, and Etihad Airways PJSC ("Etihad") of the United Arab Emirates. New Alitalia will take over Alitalia CAI's aviation business. The decision is conditional upon Alitalia CAI and Etihad's commitment to, in particular, release slots to a new entrant at the airports of Rome Fiumicino and Belgrade. Currently Alitalia CAI and Air Serbia, which is jointly controlled by Etihad, are the only carriers offering direct flights on the Rome–Belgrade route. The Commission had concerns that the monopoly created by the transaction on the Rome–Belgrade route could lead to higher prices and a loss of service quality for passengers. The commitments address these concerns.
The transaction consists of the creation of a new joint venture, New Alitalia, which will receive Alitalia CAI's aviation business as a going concern. Moreover, Etihad will acquire sole control over Alitalia Loyalty S.p.A. (Italy), a subsidiary of Alitalia CAI that manages Alitalia CAI's frequent flyer programme.
The Commission examined the competitive effects of the proposed acquisition and concluded that on all affected routes, with the exception of the Rome–Belgrade route, the transaction does not raise any serious competition concerns, mainly because of the competitive pressure exerted by other carriers. In its investigation, the Commission also took into account the interests held by Etihad in Airberlin, Darwin Airline and Jet Airways. However, the Commission's investigation indicated that the transaction would lead to a monopoly on the Rome–Belgrade route, where Alitalia CAI and Air Serbia are the only carriers offering direct flights.
To dispel the Commission's competition concerns on the Rome–Belgrade route, Alitalia CAI and Etihad submitted commitments to release up to two daily slot pairs at Rome-Fiumicino and Belgrade airports to one or more interested new entrants. Alitalia CAI and Etihad also committed to provide further incentives, such as the possibility for a new entrant to acquire grandfathering rights after a fixed period of time. Furthermore, Alitalia CAI and Etihad committed to offering a special prorate agreement, a fare combinability agreement, an interline agreement and access to their frequent flyer programme to new entrants, to make entry more likely.
These commitments adequately address the competition concerns identified by the Commission and should facilitate new entry on the Rome–Belgrade route. The Commission therefore concluded that the proposed transaction, as modified by the commitments, would not raise serious competition concerns. This decision is conditional upon full compliance with the commitments.
The transaction was notified to the Commission on 29 September 2014.
- Companies and products
Alitalia (Alitalia CAI) is Italy's national carrier active in domestic and international air transport. Alitalia is a member of the SkyTeam Airline Alliance and part of a transatlantic joint venture together with Delta and Air France/KLM. Alitalia has its hub at Rome Fiumicino airport, and in 2013 it transported 24 million passengers.
Alitalia Loyalty is a wholly owned subsidiary of Alitalia fully dedicated to the operation and development of Alitalia's Frequent Flyer Programme, the "MilleMiglia Programme".
Etihad is the national carrier of Abu Dhabi. As of June 2014, Etihad had a fleet of 102 aircraft serving 103 destinations from its hub at Abu Dhabi International airport. In 2012 and 2013 Etihad transported 10.3 and 11.5 million passengers respectively.
Air Serbia (formerly named Jat Airways) is the flag carrier and main airline of Serbia and has its hub at Belgrade Airport. Its geographic focus is on the Balkans and the Mediterranean region. Etihad has a 49% interest in Air Serbia and a management agreement with the Government of Serbia, which owns the remaining 51% of the equity.
-Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involvingcompanies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
Source: Source: http://europa.eu/rapid/press-release_IP-14-1766_en.htm