Yesterday the EU Commission gave the green light after months of fighting for the takeover of Austrian Airlines (AUA). If Austria is to complete the privatization of former state airline.
“This case shows that the consolidation in the airline sector is nothing in the way, if it is accompanied by appropriate measures to protect consumers”, said yesterday the EU Competition Commissioner Neelie Kroes. The bulky German authorities concealed the explosive nature that lies behind this statement: The World’s trying to airlines, the rising cost and competitive pressures to deal with mergers. Unlike in the U.S., the hurdles are for such mergers in Europe, however, be particularly high. Thus, Lufthansa had to just to agree to submit to the most lucrative routes between one part of Vienna and Brussels, Frankfurt, Munich, Stuttgart and Cologne, in return for EU approval coveted takeoff and landing rights to the competition. With its stilted sentence Kroes clearly wanted to clarify the ground rules for future airline mergers in Europe: The acquiring company must share its synergy gains with the remaining competitors.
What is doubly painful in this case for Lufthansa, the AUA takeover was also without the harsh conditions within the group is already controversial because the Austrians have a considerable deficit. The Austrian government, but nevertheless assumes AUA debt of 500 million euros. Together with the integration of Brussels Airlines and also purchased by British Midland, Lufthansa is so much on industry crisis, despite massive growth.