The Competition Council discussed at its meeting today the acquisition by FL Group of the cargo airline Bláfugl hf. and the freight forwarding company Flugflutningar ehf. One of FL Group's subsidiaries is the cargo airline Flugleiðir-Frakt ehf.
A decision taken by the Competition Council today states the Council's assessment that the merger's effects on competition warrant intervention. In light of this assessment, discussions took place between the competition authorities and the parties to the merger. The talks concluded with an agreement on conditions imposed on the merger by the Competition Council, which the parties will be subject to. The conditions are intended to ensure effective competition in air freight transport between Iceland and foreign destinations.
The main conditions for the merger are, among others, as follows:
- A full operational and management separation will be between Flugleiðir Cargo on the one hand, and Bluebird and Air Transport on the other.
- Icelandair Cargo, on the one hand, and Bluebird Aviation and Air Transport, on the other, are prohibited from collaborating or taking concerted action regarding marketing and commercial matters in the market for freight transport between Iceland and foreign destinations.
- The prices and commercial terms of the merging undertakings shall be general, transparent and objective, so that parties entering into similar transactions with the undertakings shall be afforded comparable terms. The undertakings are prohibited from taking measures through specific actions aimed at maintaining or strengthening their dominant market position in air transport on routes between Iceland and foreign destinations.
- The parties to the merger are prohibited from imposing conditions on transactions that link the sale of air transport on routes between Iceland and foreign destinations.
- Competitors of the companies involved in the merger shall be offered capacity on the airlines' routes between Iceland and international destinations.
Decision of the Competition Council No. 20/2005 can be found on the Competition Authority's website.
