Originally Posted by
orbitmic
With due respect, I don't think my analysis was naive: what I was saying was that when competition authorities say that a certain deal will be blocked if a take over results in a dominant position for an airline on a certain route, this will not be solved by selling the purchased airline's slots on this route to an alternative airline which would as a result of the sale become the monopolistic operator on this particular route. The very fact that it would make perfect business sense for BA to be the recipient of the route (specifically because it would consequently become the sole operator on LHR-DUB) is precisely what would undoubtedly make such a deal an unacceptable "solution" for competition authorities. The route has always operated as at least a duopoly in the past (BD and EI, now BA and EI) and downgrading it to a monopoly would lead to the same responses that we made to BA on the LHR-Scotland routes after it purchased BMI. The only realistic solution if FR wants to reassure competition authorities would be to sell the slots to alternative airlines which are currently not operating the routes in question (VS is the obvious candidate unless BE or U2 came as -currently unexpected - surprise candidates) to ensure that offer diversity is maintained once EI disappears.
The naiveté was not in the analysis of the market impact of the proposed transaction, but rather the implied point that it was a CEO's role to play a part in defending free and fair competition. BA want more slots, if you don't ask you don't get.
Market incumbents don't typically say "we could do with some more competition round here'.