DUBLIN-BASED airline CityJet, which is a subsidiary of Air France, was yesterday cleared by Britain's competition body to merge with Belgian regional airline VLM some 10 months after the two groups agreed the deal.
The merger will strengthen City-Jet's presence at London City Airport, although the Office of Fair Trading has forced it to give up a number of prime-time slots on routes to Amsterdam.
These slots will be transferred to Eastern Airways. The London City Airport to Amsterdam route is worth £50 million a year. KLM, which is also owned by Air France, already operates from London City to the Dutch capital and the OFT said it wanted to maintain competition on these routes.
"We are confident that Eastern Airways, with the necessary slots, will restore competition to pre-merger levels," the OFT said.
CityJet chief executive Geoffrey O'Byrne White welcomed the OFT's clearance, but said economic conditions had changed significantly since the deal was inked on the eve of Christmas last year.
"We have to crank things up again now," he said. "Trying to get the remedy was quite challenging. We will now be looking to maximise our schedule from London City in light of the new environment that exists. We think it is a very good deal and we're optimistic about the future."
VLM Airlines is one of Europe's biggest regional carriers catering principally for business travellers. It operates a fleet of Fokker 50s, mainly to and from its hub at London City Airport. CityJet also caters mostly for business travellers and flies from Dublin to London City and to Paris and from Shannon to the French capital. It recorded profits of €23.5 million in the year to the end of March 2007, up more than 8 per cent.
