EU to investigate KLM/Martinair deal

[Pieter C. 5]

EU To Investigate KLM/Martinair Deal

 

September 9, 2008

The European Commission said on Monday it was launching an in-depth investigation into the planned purchase of Martinair Holland by KLM, a unit of Air France-KLM, over concerns the deal may reduce competition.

 

"In order to remove the identified competition concerns, KLM proposed remedies on 18th August. However, the Commission found that these remedies were not sufficiently clear-cut to remove the Commission's serious doubts," the EU executive said in a statement.

 

The Commission now has 90 working days, until January 21, 2009, to take a final decision.

 

It said its doubts about the deal concerned "at least passenger transport between Amsterdam and the Dutch Antilles, more specifically Curacao and Aruba".

 

"At a time of consolidation in the European airline sector, the Commission must make sure that consumers continue to have a competitive choice of airline services," Competition Commissioner Neelie Kroes said in the statement.

 

KLM owns 50 percent of Martinair -- an operator of charter flights and freight services -- and is seeking to buy the other 50 percent from sea and land transport company Maersk.

 

"The proposed takeover would bring together the two main scheduled airlines operating passenger air transport services to various long-haul destinations out of Amsterdam," the Commission said.

 

"The Commission's preliminary market investigation has shown that KLM's proposed acquisition of sole control of its Dutch counterpart might substantially reduce competition."

 

(Reuters)