Concerns over the competition impact on the single-aisle aircraft market have spurred the European Commission to open an in-depth investigation into the planned tie-up between Boeing and Embraer.
The regulator says it will particularly examine the situation in the 100- to 150-seat sector – in which the two airframers have "to a certain extent" aircraft types which address the same market.
Boeing offers the 737 family in the single-aisle category while Embraer has the E-Jets, with both airframers having re-engined versions.
The Commission says that while the US and Brazilian manufacturers both compete with Airbus – which has the A320 family and A220 in this sector – they "also seem to engage in head-to-head competitions".
It also suggests Embraer has an influence over the broader single-aisle market, above 150 seats.
"Despite Embraer's comparatively small market share it…seems to exert some price constraint on the market leaders," says the Commission.
"The transaction may therefore eliminate a small but important competitive force in the concentrated overall single-aisle market," it adds.
Single-aisle types from Russia, China and Japan – including the Irkut MC-21, Comac C919 and Mitsubishi MRJ – face high entry barriers and these airframers are unlikely to replicate the "competitive constraint" which Embraer can flex, the Commission states.
"With our in-depth investigation, we want to make sure that mergers in commercial aircraft do not significantly reduce effective competition on prices and product development," says European competition commissioner Margrethe Vestager.
Boeing and Embraer have decided not to submit commitments during the initial investigation to address the preliminary concerns, says the Commission. It says it has 90 working days – until 20 February 2020 – to reach a decision.