The Office of Fair Trading has given the go-ahead to easyJet’s takeover of former British Airways franchise airline GB Airways.
The OFT ruled against referring the takeover to the Competition Commission, deciding that sufficient “potential competitors” remain at Gatwick and other London airports to ensure no decline in competition.
In submissions to the OFT, tour operators suggested fares on routes now flown by easyJet and GB Airways would rise up to 10% when the latter disappears.
The OFT acknowledged the £103 million takeover will give easyJet a dominant position at Gatwick and the airline will enjoy a market share of up to 80% on some routes.
It noted the remaining competition on routes from London to Alicante/Murcia, Malaga, Faro, Ibiza, Mahon, Palma and Marrakech was not enough to dismiss concerns.
However, the OFT concluded: “The likelihood of further entry and/or expansion on the routes is sufficient to constrain the parties [easyJet and GB Airways] post-merger.”
EasyJet announced the takeover last October and aims to integrate the smaller carrier by the autumn. GB Airways currently operates 32 routes from Gatwick and Heathrow, and easyJet 339 routes – with Gatwick its biggest base.