EasyJet has clearance from the Office of Fair Trading (OFT) to acquire GB Airways.
Its takeover of the British Airways (BA) franchise operator ” for which it paid ”103.5m ($212.3m) last October - will see the budget airline account for 24% of London Gatwick slots.
Because of competition concerns the deal was referred to the OFT, which said in a statement today (21 January) that the merger could go ahead.
”As to the loss of actual competition on overlap routes, the OFT had initial concerns because the combined market shares were more than 40% in every case and there was some evidence to suggest that entry onto a route was difficult because it is hard to obtain additional capacity at London airports.”
But OFT director of mergers, Chlo” MacEwen, said that easyJet and its rivals - such as BA, Ryanair and Monarch - have been able to overcome any barriers to entry at various London airports.
”Some entry appears to be in response to the merger announcement itself, and there is every reason to conclude that expansion or further entry by rivals would deter sustained price rises by easyJet post-merger.”
An easyJet spokeswoman said the airline is hoping it will complete the acquisition by the end of January.
GB Airways will continue to operate all routes under the BA brand until the 29 March, after which its nine A320 and six A321 aircraft will switch to easyJet colours. The budget carrier”s website is already selling GB Airways routes. Sixteen of these are new easyJet destinations, taking the carrier”s total route count to 66 from Gatwick and six from Manchester ” where it has announced plans to open a base by 2010 and add two aircraft to the three operated there by GB Airways.
GB Airways also ran five Heathrow routes, but it is not clear what easyJet will do with these as it does not operate from London”s largest ” and most expensive ” hub.
Earlier this month an easyJet spokeswoman told ABTN the possibility is there for growth on business routes: ”Our acquisition of GB Airways means that we are able to grow at Gatwick, which is a key business hub, plus build a new hub at Manchester,” she said.
”Our strategy is to increase our number of business travellers, which currently account for around 20% of our passengers.”
GB Airways will be fully integrated into easyJet by winter.