Originally Posted by
schrodingerdog
I agree. But IAG seems pretty confident the merger will be approved quite easily. Their main point is that IB+UX is still smaller in passengers share of Madrid than AF in Paris, KL in Amsterdam, BA in Heathrow and LH in Munich and Frankfurt. They will probably have to give up some domestic routes which is not a big blow as liberalisation of the high speed train routes (10€ MAD-BCN) will kill the plane there.
I'm not that convinced IAG is confident that, especially the EC, will approved the deal. Otherwise there wouldn't be a 40 m. clause. Lately Gallego started talking about concessions.... and more importantly, even though the Spanish Government may agree with IAG, the Autonomous Regions (Comunidades Autónomas) are very critic, which is replicated in many regional newspapers. I'm convinced MAD people are happy with the deal... but everyone else is not. Furthermore, in the case the EC only allows long-haul routes to be taken over by IB (IAG), UX will walk away, pocket in 40 millions and sell the entire operations to AF-KLM Group, which are happy to spend only 900 millions for UX.
Passenger share is irrelevant IMHO. What matters is competition. If IB and UX are competitors in route A-B, they won't compete in the future. That's whats relevant. More importantly, now there are two main competitors in the Spain - LATAM market. If the deal goes through, there will be just 1 - only few people are happy flying via AMS/CDG/FRA. Otherwise it'll be a monopoly (aka market dominance) Spain - LATAM.