EC "was wrong" to block Airtours/ First Choice merger - TravelMole


EC “was wrong” to block Airtours/ First Choice merger

Friday, 07 Jun, 2002 0

The European Commission was wrong to block the merger between Airtours (now MyTravel) and First Choice in 1999, the European Court of Justice said last week.

The European Competition Commissioner blocked the acquisition saying that it would lead to the three lagest travel companies having a “collective dominance”, which would undermine competition in the UK tour operating market. If the merger had gone ahead, Airtours would have become Britain’s largest travel operator, owning 34% of the UK short-haul foreign package holiday market. Airtours, Thomson and Thomas Cook would have held a 79% share of the market.

The European Court of First Instance said: “The Commission was wrong to conclude that the merger would allow the large tour operators to interpret each other’s business strategies more easily and to adopt these strategies themselves.”

MyTravel welcomed yesterday’s ruling. Chief Executive Tim Byrne said: “We are pleased with the decision that the Court has reached today. The case clearly involved complex legal and economic issues. We believe this ruling is important because it gives clarification of the European regulatory framework applicable to merging companies.”

The Financial Times reported that the decision could resuscitate the prospects of a merger. Ironically, it could be First Choice that is tempted to make a bid for MyTravel. Last month, MyTravel issued a profits warning after failing to make up the 250,000 bookings it had lost after September 11.



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