The UK competition watchdog says Menzies Aviation and Airline Services are close competitors and the acquisition could lead to less choice for airlines, potentially leading to higher prices and lower quality service
The Competition and Markets Authority has announced it could launch an “in-depth” probe into a deal that saw airline logistics specialist Menzies Aviation buy rival Airline Services.
The competition watchdog said it will refer the acquisition for an investigation if Menzies does not address its concerns about the deal – saying it could lead to higher prices and lower quality service for airline customers – by next Tuesday (14 August).
Menzies announced it had acquired Airline Services – an aircraft “de-icing specialist” – in April.
In a statement, the CMA said: “Following its initial phase one investigation, the CMA has identified competition concerns regarding de-icing services at Edinburgh, Glasgow and London Heathrow airports, and ground handling services at London Gatwick and Manchester airports.
“The merger of Menzies and Airline Services, which are close competitors at these airports, could lead to less choice for the airlines operating there, potentially leading to higher prices and lower quality service.”
Menzies Aviation and Airline Services have rival businesses
The CMA claimed both companies offer aircraft interior cleaning and maintenance, as well as ground handling – which can include the handling of baggage, ramps, passengers and cargo.
Airline Services provides de-icing and “presentation services” to 60 airlines across 12 airports in the UK.
Menzies operates at 200 airports around the globe, refueling aircraft and offering executive lounges on top of the services also offered by Airline Services.
A Menzies spokewoman said: “We note the decision of the CMA to refer the acquisition of Airline Services Limited.
“While we are disappointed by the decision, we will continue to co-operate with the CMA and its processes.
“Menzies Aviation’s first priority every day is to deliver safe and secure operations to our airline customers at over 200 airports globally.
“We are committed to growing our business and raising standards within our industry.”
Details of Menzies Aviation acquisition of Airline Services
It is expected that the Menzies buy-up of the near 30-year-old Airline Services will lead to 900 employees moving over to Menzies.
Menzies added that the acquisition would “strengthen” its position in the airport services market and expand its customer base.
Announcing the deal, Menzies Aviation 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.
“The Menzies Aviation team are eager to bring excellence, from touchdown to takeoff, to our newly expanded customer base.”