BRUSSELS, Dec 14: The European Commission said on Friday it will clear a partnership between Germany’s Lufthansa and Austrian Airlines after the airlines offered concessions to address some competition concerns.
The EU’s executive said the alliance, first proposed in 1999, had initially sparked concerns since it would choke off competition on routes between Germany and Austria.
Such fears had been addressed by the two airlines through a number of concessions aimed at facilitating competitors’ access to these routes including slot sharing; special fares; and the opening up of frequent flyer programmes to other competitors.
These offerings allowed the Commission to drop its reservations, it said.
“This alliance would have created a quasi-monopoly on all routes between Austria and Germany,” Amelia Torres, spokeswoman for European Competition Commissioner Mario Monti, told a press briefing. “But there are now at least four airlines ready to enter these routes.”
The Commission said in a statement that Adria Airway and Air Alps Aviation have already been allowed to launch regular flights between Vienna and Frankfurkt and Vienna and Stuttgart.
The exemption from EU competition rules would last for six years, the Commission said.
Lufthansa and Austrian Airlines hope to better co-ordinate fares and schedules through this partnership.
To help create competition on routes between Germany and Austria, the two airlines offered to share with other carriers up to 40 per cent of their slots on any city pair they operate.
The two airlines also agreed that each time they cut a published fare, they would do the same on three other Austrian-German city pairs where they do not have competition.
This would “ensure passengers the benefits of competition including on routes where Austrian Airlines and Lufthansa maintain a monopoly position,” the Commission said in a statement.
Lufthansa and Austrian Airlines said they would, under certain circumstances, also open up their frequent flyers points scheme to other carriers.
Finally, the two airlines said they would enter special agreements with rail operators to ensure greater choice and better transport for consumers.—Reuters