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(1742) In addition, based on the market investigation, and again despite mixed views
expressed by respondents to the second market test questionnaire
, the
Commission could not conclude with the requisite degree of certainty that Flybe
would be able to constrain the merged entity sufficiently post-transaction, mainly due
to its different business model, the lack of brand awareness in particular in Ireland,
the route composition of the divested business, and its financial situation. Moreover,
several respondents to the second market test
expressed doubts as to the ability
and the intention of Flybe to operate the divested business after 6 IATA seasons.
Therefore, the uncertainty as to Flybe's commitment to operate the divested business
for a sufficient period of time cast considerable doubts on its suitability as a
purchaser of the divested business.
(1743) Moreover, several market participants raised concerns that the divested business
would not be a viable business, because of the nature of the routes operated by Flybe
(for example, the relatively high number of seasonal routes), the lack of brand
awareness of Flybe and the fact that it would not benefit from the long haul
operations of Aer Lingus
.
(1744) The profitability, and hence the viability, of the divested business was still unclear.
(1745) It is also noted that the Commitments of 15 January 2013 provided, without further
elaboration, that "The Divestment business will be sufficiently capitalised, with
reference to historical performance of the 43 Flybe Routes and Aer Lingus’ current
capitalisation, to maintain its current estimated pre-tax profitability of […]* per
annum in the first 3-5 year trading period, and thus its long-term viability." For a
fix-it first type of remedy, such a clause would be unacceptable because of its lack of
See responses to question 14 of the Market test remedies II of 24 January 2013. See for example: SAS,
response to question 14 of the Market test remedies II -. Competitors of 24 January 2013, TAP,
response to question 14 of the Market test remedies II -Competitors of 24 January 2013, Germanwings,
response to question 14 of the Market Test remedies II - Competitors of 24 January 2013; Lufthansa,
response to question 14 of the Market test remedies II - Competitors of 24 January 2013, Loganair,
response to question 14 of the Market test remedies II - Competitors of 24 January 2013, Johnson &
Johnson, response to question 14 of the Market test remedies II - Others of 24 January 2013, Marseille
Airport, response to question 14 of the Market test remedies II - Others of 24 January 2013, Leeds
Bradford International, response to question 14 of the Market test remedies II - Others of 24 January
2013, Civil Aviation Authority of Republic of Poland, response to question 14 of the Market test
remedies II - Others of 24 January 2013, Gatwick Airport, response to question 14 of the Market test
remedies II - Others of 24 January 2013, Ebookers.ie Ltd (Flightbookers), response to question 14 of
the Market test remedies II - Others of 24 January 2013.
See responses to question 12 of the Market test remedies II of 24 January 2013. See for example: SAS,
response to question 12 of the Market test Remedies II - Competitors of 24 January 2013, Vueling,
response to question 12 of the Market test Remedies II - Competitors of 24 January 2013, Airports
Council International (ACI), response to question 12 of the Market test Remedies II - Others of 24
January 2013, Flughafen Berlin Brandenburg GmbH, response to question 12 of the Market test
Remedies II - Others of 24 January 2013, Johnson & Johnson, response to question 12 of the Market
test Remedies II - Others of 24 January 2013.
Etihad, response to question 8 of the Market test remedies II – Competitors of 24 January 2013,
Germanwings, response to question 8 of the Market test remedies II – Competitors of 24 January 2013,
Budapest airport zrt, response to question 8 of the Market test remedies II – Others of 24 January 2013,
Civil Aviation Authority of Republic of Poland, response to question 8 of the Market test remedies II –
Others of 24 January 2013, Gatwick Airport, response to question 8 of the Market test remedies II –
Others of 24 January 2013.