Iberia merger with Air Europe sparks government fears of flight monopoly

The Balearics may well have won concessions on airline prices with a reduction in airport taxes, but the airline industry is still topping the political agenda with the Iberia/Air Europa merger causing concern. Balearic Presidential Secretary Antoni Garcias said yesterday that in response to the multi-million pound deal, the government should declare flights between the islands and to the mainland in the interests of the general public. Garcias said that the there are fears that the new merger is going to gradually develop into a monopoly. Garcias said that economical air transport is vital for the island and that steps have got to be taken to ensure that the new Iberia/Air Europa group is not in a position to threaten the islands' life line by controlling air fares. Garcias said that if the air services are declared in the public's interest, regular flights at economical prices will be guaranteed and also pave the way for central government subsidies reducing air fares further. Both the Balearic government and parliament are expected to back calls for central government to agree to the proposal. Should the market be dominated by the new group, Garcias said that air travellers face the danger of being held to ransom.