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August 10, 2018

UK’s CMA raises concerns over Menzies and Airline Service merger

The UK Competition and Markets Authority (CMA) has expressed its concerns that the merger of Menzies and Airline Services will adversely affect competition within the country's airport services industry.

The UK Competition and Markets Authority (CMA) has expressed its concerns that the merger of Menzies and Airline Services will adversely affect competition within the country’s airport services industry.

Menzies’ acquisition of Airline Services will now face an in-depth (phase 2) investigation unless it offers ways of addressing the competition concerns.

Both companies provide UK airlines with services such as the de-icing of aircraft engines and wings, ground handling including baggage, ramp, passenger and airside cargo handling and cleaning and maintenance of aircraft interiors.

After completion of its initial (phase 1) probe, which was launched in June this year, the CMA identified competition concerns regarding de-icing services at Edinburgh, Glasgow and London Heathrow airports, and ground handling services at London Gatwick and Manchester airports.

“Adding Airline Services to our existing network gives us the opportunity to share facilities and expertise which will enable us to become even more competitive.”

In its findings, the competition watchdog said that the merger of Menzies and Airline Services, which are close competitors at these airports, could lead to less choice for the airlines operating there. There are fears this could lead to higher prices and a lower quality of service.

Menzies has been given until 14 August to offer an acceptable solution. If they were to do so, the merger will be referred for an in-depth phase 2 investigation.

The deal was announced in April 2018.

Airline Services delivers de-icing and aircraft presentation services across 12 UK airports to more than 60 airlines, together with ground handling operations at London Gatwick.

In April, commenting on the deal, Menzies Aviation EMEA executive vice president Andy Lord said: “This acquisition has sound strategic logic and is a significant addition to our UK service offering.

“Adding Airline Services to our existing network gives us the opportunity to share facilities and expertise which will enable us to become even more competitive. I am also excited to be taking the Menzies brand and suite of services into four new airport locations.”

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