EU voices concerns over Lufthansa Air Berlin bid

Europe’s antitrust chief expressed “quite deep competition concerns” on Friday about Lufthansa’s (LHAG.DE) plan to buy Air Berlin assets, yet another sign the German carrier may have to cough up more concessions in return for her approval of the deal.

Lufthansa wants to acquire Air Berlin (AB1.DE) units Niki and LGW and expand its own budget arm Eurowings. Rivals and travelers are worried about its dominant market position and possible price hikes.

“We have quite deep competition concerns,” European Competition Commissioner Margrethe Vestager told a news conference. “There is a risk that on some routes Lufthansa becomes de facto a monopoly, on a significant number of routes.”

“In the long term, it is important for the passengers in Germany and Austria to have a choice and also to have businesses competing in order to keep prices down. Because of course the risk of monopolies is that prices go up,” she said.

Lufthansa declined to comment.

The carrier has offered concessions consisting of airport slots and routes to the European Commission, which is now seeking feedback from rivals and interested parties.

Lufthansa will have to do more to satisfy regulatory concerns, a person familiar with the matter told Reuters earlier this week.

“We can take a number of different decisions, also based on the outcome of the market test,” Vestager said.

The Commission, which is scheduled to decide on the case by Dec. 21, will open a full-scale investigation if Lufthansa fails to address its concerns. The airlines are believed to want to avoid this.

The Commission is also set to make a ruling by Dec. 12 on easyJet’s (EZJ.L) proposed purchase of other Air Berlin assets. Sources have told Reuters the Commission is set to clear this deal without conditions.

Reporting by Foo Yun Chee, additional reporting by Klaus Lauer in Frankfurt; editing by Julia Fioretti; Editing by Alissa de Carbonnel and Philip Blenkinsop

source: AFP