Vueling/Clickair plan rapid merger implementation
By David Kaminski-Morrow
Work has begun on implementing the merger of Barcelona's based low cost operators Clickair and Vueling after securing European Commission approval for their tie-up.
European competition regulators ordered the release of slots at Barcelona and other airports in Europe as the price for clearing Spanish flag-carrier Iberia's proposed takeover of merging low-cost carriers Clickair and Vueling. Under the proposal Iberia, a minority shareholder in Clickair, would acquire control of the merged entity "Nueva Vueling" formed by the combined airlines.
The EC, having assessed the effects of the plan, judged that the merger raised "serious doubts" over competition on 19 routes - seven international and 12 domestic. Routes to Italy and France were a particular source of concern. It concluded the strong position of the merged carriers on these routes "would have been further strengthened" by their combined share of slots at Barcelona El Prat and Madrid Barajas.
As a result the airlines involved have offered to transfer slots, for free, at these and other destination airports. These slots would create the conditions for new entrants or current competitors to operate more than 150 additional weekly round-trips.
Under the merger Clickair is being absorbed by Vueling, providing a capital increase to Vueling but eliminating the Clickair brand. Vueling says the clearance allows it to move "immediately" towards the next stages of integration and "significantly reinforces" its aim of being profitable this year.
The carriers hope to finalise the combination "during the summer season", but not set a launch target. The merger process will roughly double the size of the carrier. It expects to carry 11 million passengers, serve 39 destinations and generate €800 million ($1 billion) in its first full year of combined operations.
Copyright © 2009 Aviation News Release
