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Last Updated: Tuesday, 18 May, 2004, 14:35 GMT 15:35 UK
Easyjet challenges KLM takeover
KLM and Air France logos
The takeover will restrict consumer choice, Easyjet claims
Budget airline Easyjet has launched a legal challenge against Air France's takeover of Dutch carrier KLM.

The British no-frills carrier said it had asked the European Court of Justice (ECJ) to annul the deal on the grounds that it restricted consumer choice.

Easyjet chief Ray Webster said the European Commission - which regulates corporate mergers - should not have allowed the takeover to go ahead.

"The interests of consumers must always come first," he said in a statement.

The Air France-KLM takeover, completed earlier this month, created Europe's biggest airline by traffic.

Squeezed out?

The two airlines cleared a final hurdle when the European Commission said the deal could go ahead on condition that they give up 94 of their combined daily take-off and landing slots to rivals.

We think this is a very pro-competitive and pro-consumer result
European Commission spokesman
But Easyjet argues that there are still too few available slots in Paris, and that Air France continues to dominate the wider French market, pushing up prices for French consumers.

"There are a number of significant barriers to entry that prevent any degree of network competition to Air France," Mr Webster said.

The latest legal challenge ups the ante in a bitter competitive struggle between Air France and Easyjet, which ranks as France's second biggest operator after the national airline.

Last week, Easyjet took legal action against French airport landing slots regulator Cohor for allegedly favouring Air France.

Accusations 'untruthful'

The European Commission defended its decision to approve the Air France-KLM takeover.

"We have adequate remedies in place to facilitate new entries. We think this is a very pro-competitive and pro-consumer result, and we stick by that," a spokesman said.

Air France chairman Jean-Cyrile Spinetta said Easyjet's legal challenge was groundless.

"These accusations are untruthful," he told French radio.


SEE ALSO:
Tough outlook hits Easyjet shares
05 May 04  |  Business
Air France seals takeover of KLM
04 May 04  |  Business
Air France opens offer to buy KLM
05 Apr 04  |  Business
Air France and KLM get go-ahead
11 Feb 04  |  Business
European airlines join forces
30 Sep 03  |  Business
Does KLM-Air France make sense?
30 Sep 03  |  Business


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