Airline Mergers a Concern for European Consumer and Travel Bodies

Five European consumer and travel associations are expressing concerns over an increasing number of airline mergers, which they say will impact the competitiveness of the airlines market.

In a letter to Executive Vice President of the European Commission for “A Europe Fit for the Digital Age” and European Commissioner for Competition Margrethe Vestager this week, the European Travel Agents’ and Tour Operators’ Associations (ECTAA), which acts for representatives of consumers, passengers, air ticket intermediaries, and airports, are requesting that any potential anti-competitive effects to the European air travel industry be considered when assessing the operations submitted to its review, “regardless of political pressure”.

“Where serious concerns arise, the Commission shall not shy away from using the tools at its disposal, including considering such mergers as incompatible with the common market or demanding significant remedies,” said the letter.

ECTAA warns against signing off on a series of airline mergers, warning consolidation among carriers threatens “higher prices, lower quality services and fewer satisfied passengers”, adding that Europe’s consumers deserve a competitive and healthy airline market.

According to the ECTAA, increasingly dominant airline groups have formed in successive mergers. The wave of airline consolidation could drastically limit competition on thousands of connections, thus giving more leeway to market dominant players to develop and abuse their positions, at the expense of European travelers, the letter reads.

Photo source: ACI Europe

The air travel industry bodies add that together with outdated airport slot allocation rules, airline consolidations will lead to many European airports becoming congested.

Indicative of the worrying trend, in 2005, the Top 5 European airline groups accounted for 47 percent of intra-EU traffic. Today, this figure is set reach 73.5 percent in 2024.

“Concentration is set to increase significantly with acquisitions being currently assessed by the EC or looming,” the air travel industry bodies said, referring to the acquisitions of ITA Airways by Lufthansa Group, of Air Europa by IAG, the purchase of a minority stake in SAS by Air France/KLM and the anticipated sale of TAP Air Portugal.

Additionally, in the US, increased consolidation and the resulting lack of competition has led to higher prices, lower quality services and fewer satisfied air passengers.

ECTAA goes on to add that this concentration of dominance is growing with several acquisitions currently under review by the Commission and is requesting that it should “carefully and critically review the ongoing European airline merger wave” and to protect airline competition.

The letter was signed by ACI Europe, EU Travel Tech, ECTAA, BEUC (European Consumer Organization), and the European Passengers’ Federation.