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Regulator flags concerns over possible IAG-Norwegian tie-up

Any future merger of Norwegian with IAG could lead to a reduction in competition at Barcelona's El Prat airport and harm the interests of Catalan citizens, the Spanish region's competition regulator has warned.

The Autoritat Catalana de la Competencia (ACCO) says that a preliminary analysis shows that in the event of IAG acquiring control of the Oslo-based carrier there would be a "significant reduction" in competition due to the overlap in the two companies' route networks.

Unless this was offset by "significant efficiency gains", that prices could rise and the quality of service experienced by passengers could be negatively impacted, the regulator warns.

IAG disclosed earlier this month that it had acquired a 4.61% stake in Norwegian and could use this is as a springboard to make a full takeover bid for the Scandinavian carrier.

ACCO says that Norwegian and IAG-owned airlines overlap on 17 routes operated from the Spanish airport and that any tie-up between the two carriers would leave the Spanish-headquartered airline group with a "monopoly" on four routes to Dubrovnik, Gothenburg, Los Angeles and Oakland.

On routes to Copenhagen, Dusseldorf, Edinburgh, Gran Canaria, Helsinki, Reykjavik and Oslo competition would be reduced from three airlines to two, while on services to Hamburg, London, Stockholm, Tel Aviv, Tenerife and Warsaw, competition could also be reduced.

ACCO says that based on its examination of the publicly available data, any future proposed tie-up between the two airlines would need to be examined analysed in depth by Spain's competition authorities.

Norwegian competes with Vueling on a number of European routes from El Prat and began operating head-to-head with IAG's long-haul low-cost unit Level on transatlantic services to LA and Oakland in 2017.

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