Mergers: European Commission clears creation of joint venture by Fortress (CityJet) and AIV (Air Nostrum)

The European Commission has approved, under the EU Merger Regulation, the creation of a joint venture by Fortress Investment Group (‘Fortress’) of the US, and Air Investment Valencia (‘AIV’) of Spain.

The joint venture will combine the activities of Fortress’ CityJet of Ireland and of AIV’s Air Nostrum of Spain. Fortress is a global investment management firm, which manages assets on behalf of institutional clients and private investors worldwide. AIV is an aircraft dry lessor and provider of fleet supply services to air operators, among other. It is also active in the operation of air routes between Europe and Africa, mainly through charter flight and wet-lease services.

The transaction was initially notified in June 2019 and in July of the same year, the Commission approved it unconditionally.  It concluded that, although the activities of CityJet and Air Nostrum overlapped in the provision of wet-leasing services to airlines and charter flights, the transaction would raise no competition concerns, because the companies have moderate market shares, a sufficient number of competitors remain on the market and the barriers to entry are low.

In January 2023, the parties re-notified the transaction as the deal has not been yet executed. The Commission has now concluded that the competitive landscape and market conditions remained broadly the same and that the transaction would still not raise competition concerns.

The transaction was examined under the normal merger review procedure.