competitors and the number of passengers on each route were assessed. Where necessary,
the number and duration of frequencies offered by competitors and their suitability for time
sensitive passengers, in particular, were assessed. On the basis of these criteria, no
competition concerns were identified. In addition, the market investigation did not reveal
any competition concerns with respect to the identified direct/indirect and indirect/indirect
overlaps with the exception of LH's and OS' market position in Central and Eastern Europe
("CEE").
(269) Some respondents to the market investigation in phase I voiced concerns with respect to
the strong market position of LH and OS in CEE, concerning mainly the post-transactional
control by LH of a very substantial part of a so-called Central European market, particularly
as a result of their control of the most important hubs catering CEE and their well-developed
networks concerning this area. The results of the more refined phase II market investigation
showed, however, that the vast majority of corporate customers in particular do not see any
negative impact in relation to a potentially strengthened position of the merged entity for
flights serving the CEE and indicated existing alternative competitors.
(270) OS served 48 destinations in CEE,
131
and LH 40 destinations
132
in 2008, with 26
destinations being served by both LH and OS.
133
There appear, however, to be other
significant competitors that serve CEE. In particular, Europe's largest carrier Air
France/KLM serves 15 destinations in CEE using its own network, while it serves an
additional 11 destinations in co-operation with its SkyTeam partners Aeroflot (the national
airline of Russia that has a significant network in CEE due to its current and historical links
with CEE countries) and CSA (the Czech flagship carrier).
134
In addition, the third largest
European airline, BA, serves 13 destinations in CEE using its own network, while Malev
(the Hungarian flagship carrier), a BA partner in the oneworld alliance, serves 22
destinations in CEE. Hence, there are other important carriers that serve CEE and that can
provide an alternative to LH and OS.
(271) The finding that Eastern European carriers can also provide an alternative to LH/OS is
further confirmed by the market investigation that revealed that the vast majority of travel
agents compare the LH/OS's prices with those of alternative carriers, including Eastern
European carriers (such as MALEV or Czech Airlines). Also, the majority of corporate
customers indicate that they do not procure their flights from one airline, but, depending on
the CEE destination, search for flight alternatives with other carriers, including Eastern
European carriers. It thus appears that there are other carriers competing with LH/OS in
CEE and can offer alternatives to customers who want to fly to CEE destinations.
131 Source: OS internal documents, OS Management presentation dated September 2008, p. 3. From the
48 destination, 5 destinations are operated by partner airlines.
132 Source: OS internal documents, OS Management presentation dated September 2008, p. 3. From the
40 destinations served by LH, 23 destinations were served from the LH hub Munich.
133 In 2008, LH, LX and OS served each the following 8 destinations in CEE: Sofia, Prague, Budapest, Warsaw,
Bukarest, Belgrade, Moscow, St. Petersburg. Moreover, LH and OS served each further 18 destinations: Tirana,
Yerevan, Baku, Sarajevo, Minsk, Tbilisi, Zagreb, Astana, Vilnius, Riga, Krakow, Sibiu, Timisoara, Nizhniy
Novgorod, Rostov, Ekaterinburg, Donetsk, Kiev.
134 Source: OS internal documents, BCG presentation to the Supervisory Board dated 28 July 2009, p. 90.
60