Air France KLM has offered to divest a number of take-off and landing slots at London City and Amsterdam to an unknown buyer.
The Office of Fair Trading (OFT) was going to refer the airline”s acquisition of VLM to the Competition Commission as Air France already owns CityJet - another major player at the Docklands business hub ” and was worried that the merger substantially lessens competition in the provision of scheduled flights for business travel between London City and Amsterdam's Schipol airport.
However, it is now considering the airline”s offer.
”While entry and expansion permitted us to clear the recent easyJet/GB airways case, the critical entry barrier here is that business travellers tend to fly at peak times, when LCY and LHR are severely congested,” said OFT senior director of mergers Simon Pritchard. ”Even if corporate customers encourage [other airlines], this hinders [them] from adding peak-time flights to AMS.
”As a result, we have concerns on LCY to AMS, a route worth more than ”50m per year. We have insisted on divestment of the slots to an up-front buyer to be used on this route. This will provide a safeguard that direct competition will be restored, such that UK business travellers will again have two principal choices from LCY to AMS at peak times.”
An Air France spokesman told ABTN that details of its divestment offer are not being given.
”It”s up to the OFT to decide whether the remedies proposed by us on this route can be implemented within reasonable time limits,” he said.