Competition Authorities Will Prevent a Potential Monopoly

Lufthansa has announced that it plans to take over the majority of the airline Air Berlin, which recently declared insolvency. Professor Achim Wambach, PhD, president of ZEW and chairman of the Monopolies Commission, offers his thoughts on the announcement.

“This will be good news for Air Berlin employees once all the negotiations have been completed. I do still expect the competition authorities to undertake a thorough examination of the acquisition conditions, paying particularly close attention to flight routes as well as take-off and landing rights. Germany and Europe should not simply be seen as a homogeneous market; rather, the take-over needs to be examined on a route-by-route basis. Examining each individual route will certainly not be easy.

Though globally, the Lufthansa Group may feel like it faces great pressure from its international competitors, on many flight routes within Germany and the EU, Lufthansa and its subsidiary, Eurowings, are already powerful market players. The acquisition of Air Berlin would make the market even more concentrated. In order to prevent the approval process from becoming too protracted, it would be helpful if Lufthansa were to offer some assurances to the cartel authorities ahead of time in order to mitigate the issues regarding competition law.”