The European Commission said on July 1 it had launched an in-depth probe into the planned acquisition of Austrian Airlines by Lufthansa of Germany.
The European Union (EU)'s antitrust watchdog said that its initial investigation indicated that the proposed bid could, on certain routes, give rise to reduced choice of airline services for passengers and the likelihood of higher fares.
"There are therefore serious doubts as to the proposed takeover's compatibility with the (EU) single market in the absence of appropriate remedies," it said.
Lufthansa is the largest German airline with hubs at Frankfurt and Munich airports. Lufthansa also controls Swiss, based at Zurich airport, Air Dolomiti, Eurowings and low-cost carrier Germanwings. As a leading member of the Star Alliance, it also cooperates closely with a number of other airlines.
Austrian Airlines is Austria's largest airline with its principal hub in Vienna. It is a full-service air carrier. Its subsidiaries include Lauda Air and Tyrolean Airways.
Lufthansa plans to pay 366 million euros (516 million U.S. dollars) to buy 41.56 percent stake of Austrian Airlines now owned by the Austrian government.
The commission's initial investigation found that the proposed transaction would lead to competition concerns with respect to inter alia the routes from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels.
Lufthansa proposed remedies but the commission found that these remedies, while reducing significantly the number of problems, were not sufficient to allow the merger to be cleared at this point in time.
"The commission has decided to open an in-depth merger investigation into Lufthansa's takeover of Austrian Airlines because it has serious concerns that the result for passengers could be higher prices or reduced services on certain routes," said EU Competition Commissioner Neelie Kroes.
"It is essential that airline consolidation does not deprive consumers of a choice of airlines, competitive prices and other benefits of liberalization of air transport in the EU," she added.
Source:Xinhua
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