Scottish logistics firm John Menzies has been warned its £153million deal to buy plane refueling specialist Asig may lead to a substantial lessening of competition for ground-handling services at Aberdeen International Airport (AIA).
The Competition and Markets Authority (CMA) said the acquisition, which was announced by Edinburgh-based Menzies in September and is expected to complete by the end of May, would leave Swissport as the only credible rival for baggage, ramp, passenger, airside cargo handling, de-icing and other ground services at AIA.
At other airports where both Menzies and Asig are active, CMA found there would be a number of credible competitors that could bid for future contracts.
The competition watchdog said Menzies could avoid the merger being referred for an in-depth investigation if it offered a remedy to address its concerns about AIA. The company was given a deadline of this Thursday making such an offer.
CMA economics, markets and mergers director Kate Collyer 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.”
Menzies said it was considering its position and would respond to the CMA in due course.
Forsyth Black, managing director at the group’s aviation arm, added: “We will work with BBA Aviation plc (Asig’s current owner) and the CMA as we look to work through the issues raised in regards to Aberdeen Airport.”