EU Competition Commissioner Mario Monti has ordered an investigation into the SAirGroup's purchase of a 42% stake in PGA-Portugália adding to its current partnerships with Portuguese flag carrier TAP in which it already holds a 34% stake.
Monti has expressed "strong doubts" that the deal might lead to a dominant market position being established, particularly on many secondary routes out of Portugal. The Portuguese Government also has interests in TAP and Portugália as well as charter operator SATA.
Routes from Lisbon to Barcelona, Lyon, Oporto, Faro, Nice, Madrid and Milan would be dominated by Portugália/TAP, as would Oporto to Lyon and Barcelona and Faro-Nice, as well as charter flights from Lisbon.
Philippe Bruggisser, president of the SAirGroup, claims that in small markets such as Austria, Portugal or Switzerland, competition between a limited number of companies is a luxury and that co-operation is needed if profits are to be made. He points to the relationship between Crossair and Swissair in Switzerland as a clear example.
Source: Airline Business
