Airport Ground Handling Merger May Give Rise to Competition Concerns

The Competition and Markets Authority (CMA) has found that the merger may lead to a substantial lessening of competition (SLC) in the supply of ground handling services at Aberdeen Airport (including baggage, ramp, passenger, airside cargo handling and de-icing).

Menzies and ASIG are close competitors at Aberdeen Airport and, following the merger, only Swissport will remain as a credible bidder for airlines located there.

In contrast, at the other airports where both Menzies and ASIG are active (Manchester and London Heathrow), the CMA found that there would be a number of credible competitors that could bid for future contracts.

Menzies Aviation plc and Menzies Aviation Inc. (Menzies) agreed to acquire ASIG Holdings Limited and ASIG Holdings Corp. (ASIG) from BBA Holdings Limited and BBA Aviation USA Inc. Both Menzies and ASIG provide a range of services to airlines at UK and international airports.

Menzies can avoid the merger being referred for an in-depth investigation if it can offer a remedy to address the CMA’s competition concerns at Aberdeen Airport. Menzies has until 22 December 2016 to do so.

Kate Collyer, the CMA decision-maker in this case, said:

“It is important that we ensure that airlines transporting passengers to and from Aberdeen Airport are protected against any reduced service quality or increased costs as a result of this merger. We hope that Menzies will respond to our competition concerns and ensure that effective competition between ground handling service providers at Aberdeen Airport is restored.”

All other information relating to this investigation can be found on the case page.