THE COMPETITION COUNCIL AUTHORISED THE CONCENTRATION DEAL BY flyLAL GROUP SERVICES SUBJECT TO CONDITIONS
Press release 18/09/2008
Having examined in its meeting the application lodged by flyLAL Group Services AB for the authorisation of a concentration deal by acquiring up to 100 percent Baltic ground services UAB, the Competition Council authorised the transaction subject to certain conditions. The conditions established by the competition authority stipulated that Baltic ground services UAB cannot be reorganised by way of merger with or the acquisition of flyLAL Group Services AB or an undertaking related thereto without a separate permission of the Competition Council.
The Competition Council concluded that in this particular case of concentration the relevant markets in which the companies participating in the concentration deal operate are vertically related by nature of the services being provided. The principal activity of flyLAL – Lithuanian Airlines AB that belongs to flyLAL Group Services AB group is the carriage of passengers, transportation of freight and mail shipments by regular and charter flights. Baltic ground services UAB mainly operates in the plane ground service market holding a significant share of this market of up to around 41 percent in the Vilnius International Airport in which identical services are provided by a sole competitor only. Due to safety considerations, technical and technological barriers the entry into the plane ground service market is rather limited.
Having considered the reasoning behind the intended concentration deal – the strategic development of the range of the services provided by flyLAL Group Services AB to air companies, the Competition Council also made a due reservation for a possible competitive threat in case of the acquisition by flyLAL Group Services AB of a sole control over Baltic ground services UAB. Therefore, the authorisation was issued subject to certain conditions basically with a view to avoiding a possible restriction of competition in the relevant markets.
The Competition Council Press Officer