The purchase of Air Europa by Iberia, still pending authorization from Brussels, could lead to a monopoly situation on flights between Barcelona and Madrid and “harm” passengers at El Prat airport, according to the Catalan Aviation Authority. the Competition (ACCO).
The organization has analyzed the offer in Barcelona and concludes that, if the operation is carried out without commitments to guarantee competition, the IAG group (parent of Iberia, Vueling, Level, British Airways and Air Lingus) would become the only operator of the El Prat-Barajas route.
The ACCO explains that the holding company has 87 destinations from El Prat through its five airlines. “Likewise, Air Europa currently operates in terminal 1 of Barcelona airport and offers two destinations: Madrid-Barajas Adolfo Suárez (MAD) and Palma de Mallorca (PMI),” he underlines in his analysis. The entity observes “overlaps” between Air Europa and the airlines of the IAG group in these two destinations.
If Brussels authorized the operation without being subject to commitments, the IAG group would become the only operator on the flights between Madrid and Barcelona and, therefore, “would begin to offer this route under a monopoly regime,” insists the ACCO.
Currently, this route is carried out by Iberia with the air bridge and Vueling, from the IAG group, with a total of 107 weekly flights (88.43%), and Air Europa, with 14 weekly flights (11.57%). However, the Catalan Authority considers that competition from high-speed trains on the Barcelona-Madrid connection could have a beneficial effect for users.
It also observes possible risks on the Barcelona-Palma de Mallorca route. This route is carried out by Ryanair, with 22 weekly flights, Air Europa, with 35 flights, and Vueling, from the IAG group, with 72 flights. Therefore, if the acquisition were to take place without commitments, it would go from the three current operators to only two, and the IAG group would go from having a market share, in terms of flight offering, from the current 55.81% to 82.95%.
That is, Ryanair would become IAG’s only competitor, with a flight share of 17.05%. “In addition, in this case there is no strong competition from high-speed trains, and the competitive pressure for the same journey by sea is considerably less, due to the duration of the journey,” the organization highlights.
As for the rest of the airports in Catalonia, flights are not offered to these two destinations, neither from Girona airport nor from Reus airport. You can only fly to Palma de Mallorca from Lleida-Alguaire airport, three days a week (Monday, Friday and Sunday), on a service operated by Air Nostrum. “Therefore, this reduction in competition, if not offset by significant efficiency gains, could lead to an increase in price and/or a reduction in quality,” ACCO maintains.
The purchase of Air Europa by Iberia is currently under study by the European competition authorities. Iberia has already stated in this sense that it will offer route transfers to ensure the operation.
