Air Transport

Air France-KLM will wholly-own Dutch carrier Martinair by the end of this year after securing long-awaited clearance for the takeover from the European Commission.

KLM has held a 50% share of Martinair for several years but attempts to acquire the outstanding balance have failed to receive regulatory approval.

But the European Commission, which opened an inquiry into the renewed takeover bid in September, has finally permitted KLM to complete the acquisition.

Martinair's passenger operations cover long-haul holiday routes. The Commission had expressed concern about competition between Amsterdam and the Dutch Antilles, but it says its inquiry found that the takeover would have "only a limited market impact", because of competition posed by TUI carrier Arkefly.

Not only is Martinair already part-controlled by KLM, says the Commission, but it has weakened as a competitor. It needs KLM's assistance to renew its long-haul fleet and become a stronger airline.

Competition commissioner Neelie Kroes says: "I was very conscious of the need to safeguard the interests of consumers flying to long-haul holiday destinations.

"After a thorough investigation, I am now satisfied that consumers will continue to have a competitive choice of airline services after the acquisition of Martinair by KLM."

KLM is acquiring the Martinair shareholding from AP Moller-Maersk Group. The transaction will be effective from 31 December.

"With the European Commission approval, economies of scale and synergies become available," says KLM chief Peter Hartman. "Plans for the future of Martinair within the group will be developed in the coming period."

Martinair says that it can play a "complementary role" for Air France-KLM and that the European clearance is "encouraging" following a "long period of uncertainty".