Alan George/BRUSSELS Julian Moxon/PARIS
British Airways and KLM have already submitted a "briefing paper" on their proposed merger to key European Commission officials in a bid to accelerate the approvals procedure should they go ahead with the move.
EC sources say Brussels-based lawyers acting for the companies submitted the paper on 14 June, two weeks before BA chief executive Rod Eddington and KLM counterpart Leo van Wijk briefed European Union competition commissioner Mario Monti on their plans. "It was not formally a pre-notification of a merger, but it came close," says one insider.
The EC's merger regulation procedure allows companies to issue documents putting officials on notice and enabling them to start examining the merger. A KLM source says Monti has promised to "do his utmost" to process the dossier.
Such a filing is followed by formal notification of a merger and an initial, one-month investigation. If no reason emerges to amend or block the move, it is then approved at that point; if conditions are attached, a fast-track procedure can still be followed, taking six weeks from the start of the first-phase enquiry. A second-phase investigation could take months, however.
Brussels sources suggest that a BA/KLM deal could be approved under the six-week procedure, and though some at the UK flag-carrier are less optimistic, BA is eager to move as quickly as possible, with a decision on a merger-in-principle likely to be taken by the end of this month.
In assessing a BA/KLM deal, the EC's Merger Task Force would focus on the plan's impact on inter-hub competition, rather than on specific routes, say well-placed sources. This implies that Brussels would require significant remedies, probably the relinquishment of slots. It also seems likely that BA and KLM would be forced to spin off the London Stansted-based low-cost subsidiaries Go and Buzz.
Source: Flight International
