Air Nostrum and CityJet receive permission to merge

The European Commission has approved the merge of Air Nostrum of Spain and CityJet of Ireland. The EC issued this statement:

The European Commission has approved, under the EU Merger Regulation, the creation of a joint venture between Fortress Investment Group, of the US, and Air Investment Valencia, of Spain. It will combine the activities of CityJet of Ireland and of Air Nostrum of Spain.

Fortress Investment Group is a global investment management firm, which manages assets on behalf of institutional clients and private investors worldwide.

Air Investment Valencia, through a subsidiary, is active, among other things, as aircraft dry lessor and provider of fleet supply services to air operators. It is also active in the operation of air routes between Europe and Africa, mainly through charter flight and wet-lease services.

The activities of CityJet and Air Nostrum overlap in the provision of wet-leasing services to airlines and charter flights. The Commission concluded that the proposed transaction would raise no competition concerns, because the companies have moderate market shares, a sufficient number of competitors remains on the market and the barriers to entry are low. The transaction was examined under the normal merger review procedure.

Previously the two airlines issued this statement of intent:

The coming together of these two regional airlines would see the creation of the largest pan-European regional airline group.

Air Nostrum, who employs 1,450 people, is especially well known as the Regional Operator for Iberia under a longstanding franchise agreement flying to more than 60 destinations within Europe and Africa, with a fleet of 50 aircraft, including 30 Bombardier CRJ1000 regional jets. Air Nostrum is also active on wet lease services for customers across Europe, including Lufthansa, SAS, Binter or Croatian Airlines.

CityJet employs 1,250 people across 9 European countries and operates an extensive regional network of services under wet lease contracts with Air France, Brussels Airlines and SAS with a fleet of over 40 aircraft based in nine locations across Europe. This fleet includes 22 new Bombardier CRJ900 regional jets acquired specifically for wet lease services.

The two airlines are coincidentally of very similar age, having been founded in 1993 (CityJet) and 1994 (Air Nostrum), both now being close to their 25th year of operation.