The European Commission has tonight opened an in-depth probe into BA owner IAG’s planned purchase of Spain’s Air Europa.
The Commission, which oversees EU antitrust policy, said it had concerns that the proposed transaction would reduce competition for Spanish domestic routes and on international routes to and from Spain.
The body said it had 90 working days until 5 November to take a decision and that the airlines had decided not to submit potential remedies during the initial investigation.
The deal, which was struck at the beginning of the year, was initially due to close in the second half of 2021.
The decision to investigate comes after increased scrutiny on EU competition rules for the aviation industry after the pandemic.
“IAG, which flies with Iberia and Vueling among others, and Air Europa are leading airlines in Spain. They are also key providers of connectivity between Spain, the rest of Europe and Latin America,” Commission executive vice president Margrethe Vestager said in a statement.
“We will carefully assess whether the proposed transaction would negatively affect competition on domestic, short-haul and long-haul routes to and from Spain, possibly leading to higher prices and reduced quality for travellers,” she continued.
She added that, although the financial situation of many airlines was still fragile, it was important that the recovery of the sector took place in a competitive environment, preserving choice for customers.
FTSE-listed IAG, which also owns Aer Lingus, agreed to buy Air Europa for €500m (£429.7m) in January, cutting its initial offer for the short-haul carrier in half.