EU allows Iberia British Airways merger & alliance with AA

– British Airways (BA) and Iberia took an important step and signed last April a merger agreement that created one of the largest airlines in the world and would help them compete more effectively in a rapidly changing market.

“The reality today is that there is a growing consolidation within the market due to the difficulties and changes that we’ve to face,” said European Competition Commissioner Joaquin Almunia.

The BA-Iberia merger will result in the second largest European airline in market value terms behind Lufthansa, combining the strength of the Spanish company in Latin America with the presence of BA in Africa, Asia and North America.

The European Commission said that according to its analysis the new group faces enough competition from other airlines in the key London-Madrid route, as well as on transatlantic flights. “The Commission concluded that the transaction would not significantly impede effective competition in any of the markets affected by the merger,” Brussels said in a statement.

BA said it expected to complete the merger by the end of the year.

In a separate decision, Brussels on Wednesday cleared the way for the joint venture of members of the alliance, “Oneworld” Iberia, BA and American Airlines on transatlantic flights, after those airlines agreed to allow competition.

The European Commission arbiter in matters of competition in the European Union (EU), had opened an investigation in April 2009 to verify whether the alliance was damaging the offer on transatlantic airline routes.

To reassure Brussels, the airline had offered to free the take-off and landing slots at Heathrow Airport in London, and in that way assist competitors who would like to enter or expand their routes between London and New York, Boston, Dallas and Miami.

“After a market review, the Commission has concluded that the commitments submitted were adequate to remedy the competition concerns, and closed the investigation,” the EU executive said in a statement.

BA welcomed the decision by Brussels. “It’s a pragmatic decision because we can now launch the joint venture as soon as possible,” said the British group’s executive director, Willie Walsh.

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