Europe's competition commissioner, Karel Van Miert, has warned that curbs will have to be placed on Boeing's use of "exclusive" aircraft deals as the price of approval for the group's planned merger with McDonnell Douglas (MDC)

Van Miert says that the European Commission (EC) will present Boeing and MDC with a list of objections to the proposed deal by the end of May, to which they would be expected to offer "formal remedies". A final EC decision is then scheduled to be made by the end of July,

A major concern centres on the recent use of "exclusive" deals which have already locked in American Airlines, Continental Airlines and Delta Air Lines to order their future aircraft from Boeing.

Van Miert appears to accept Airbus Industrie's arguments that such arrangements are anti-competitive on the grounds that they prevent the carriers from talking to other manufacturers about any new products.

"There is no incentive to develop new aircraft or improve existing products," says Airbus, which points out that its own large US Airways deal does not prevent the carrier from talking to other manufacturers.

Boeing has reacted calmly to Van Miert's condemnation of the proposed merger and is waiting for the EC statement before deciding on its response.

"We need to understand what the objections are, and we need to answer their concerns," the US manufacturer says. Boeing confirms that curbs on exclusive deals are almost certain to be among the objections raised. The US Federal Trade Commission is expected to complete its review by late June or early July.

The EC has powers to review all mergers and acquisitions involving companies with sales of more than Ecu250 million ($280 million) in the European Union and with international sales in excess of Ecu5 billion.

Source: Flight International