Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 23.7.2019  
C(2019 ) 5608 final  
PUBLIC VERSION  
 
To the notifying parties  
Subject : Case M. 9062  – Fortress Investment Group/Air Investment Valencia/JV  
Commission decision pursuant to Article 6(1)(b)  of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 19 June 2019, the Commission received notification of a proposed concentration 
pursuant to Article 4 of Council Regulation (EC) No 139/2004.3 Fortress Investment 
Group (USA) and Air Investment Valencia (Spain) acquire, by way of purchase of 
shares, joint control within the meaning of Article 3(1)(b) and 3(4) of the Merger 
Regulation of a newly created company constituting a joint vent ure (the “JV”), in 
which (i) Fortress Investment Group will contribute the business of CityJet and (ii) 
Air Investment Valencia will contribute the businesses of Air Nostrum  (the 
“Transaction”) . The Transaction is accomplished by way of purchase of shares.   
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of 
“Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p . 3 (the “EEA Agreement”).  
3 OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’). 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and 
other  confidential information. The 
omissions are shown thus […] . Where 
possible the information omitted has been 
replaced by ranges of figures or a general 
description.  
 
 
2 (2) CityJet and Air Nostrum are both regional airlines providing – amongst others - wet-
leasing services (leasing of aircraft with crew and maintenance services) to other 
airlines.  
1. THE PARTIES  
(3) Fortress Investment Group (“Fortress”) is global investment mana gement firm 
belonging to SoftBank Group (Japan), a group comprising subsidiaries involved in 
telecommunication products and services, primarily in the USA and in Japan. 
Fortress is pre -Transaction jointly controlling CityJet, together with CityJet Holdings  
Ltd.4 CityJet is a European regional airline based in Dublin, Ireland. It is operating a 
fleet of 35 aircraft and is providing wet -leasing services to other airlines across 
Europe. Fortress is also the parent company of Falko Regional Aircraft Limited 
(Falko), a provider a dry lease and other aviation services to airlines worldwide, 
including in Europe.  
(4) Air Investment Valencia is a holding company indirectly fully owned by Mr Carlos 
Bertomeu. Through Air Investment Valencia, Mr. Bertomeu pre -Transaction so lely 
controls Air Nostrum.5 Air Nostrum is a regional airline based in Valencia, Spain, 
and is operating a fleet of approximately 50 aircraft. It is providing scheduled flight 
services under a franchise agreement with Iberia. In addition, Air Nostrum is 
providing charter services, wet -leasing services, crew training and aircraft 
maintenance services to other airlines. Air Nostrum solely controls Aviatech & 
Consulting, S.L., a provider of technical services such as flight control and flight 
operations, and H ibernian Airlines Limited, an airline based in Ireland, which is 
providing wet -leasing services, currently only to Air Nostrum. Both companies will 
also be contributed to the JV.  
(5) The proposed transaction6 in essence amounts to the combination of CityJet’s  and 
Air Nostrum’s activities in wet -leasing.  
2. THE CONCENTRATION AND THE  ACQUISITION OF JOINT C ONTROL  
(6) The businesses of City Jet and Air Nostrum will be transferred to a newly created 
joint venture , which will own 100% of the shares in Air Nostrum and 100% of the 
shares in CityJet. The current shareholders of Air Nostrum  (including its controlling 
parent Air Investment Valencia)  will hold 70% of the JV. The remaining 30% of the 
shares in the JV will be owned by Fortress.  
(7) Post-Transaction, the JV will be jointly controlled by Fortress and Air Investment 
Valencia.7 Air Investment Valencia is the majority shareholder of the JV, but 
                                                 
4  CityJet Holdings Ltd. is owned by three natural persons. [Information on strategic decision making rights 
and economic activities of the relevant individuals]  he is not con sidered to be a natural person controlling 
CityJet in accordance with paragraph 12 CJN.  
5  Air Nostrum has several shareholders. Mr Carlos Bertomeu holds both individually and through Air 
Investment Valencia 58,71% of Air Nostrum’s shares. Carlos Bertomeu,  through Air Investment Valencia, 
solely controls Air Nostrum (Form CO, paragraph 33).  
6  This decision is without prejudice to any potential future state aid enquiry into financing of Air Nostrum’s 
aircraft.  
 
 
3 Fortress has negative joint control together with Air Investment Valencia through 
certain veto rights conferred to Fortress rega rding key business decisions. Fortress 
and Air Investment Valencia will determine the initial budget and business plan 
together. In addition, for the first […] years, Fortress will have veto rights regarding 
the approval of annual budget and business plan,  the appointment of the CFO and 
the termination of contracts with the current CityJet management team. Those veto 
rights will exist for a period of […] years. According to paragraph 34 CJN, only a 
relatively short period not exceeding one year will make it  unlikely that the joint 
control period has a distinct impact on the market structure and could be considered 
as not leading to a change in control on a lasting basis.  
(8) As a result, Fortress and Air Investment Valencia will acquire joint control over the 
JV on a lasting basis.  
3. FULL-FUNCTIONALITY OF THE  JV 
(9) The JV will be full -function within the meaning of Article 3 (4) EUMR since it has 
sufficient resources, activities beyond one specific function for the parents, access to 
the market and operates on a las ting basis.  
4. EU DIMENSION  
(10) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million (Softbank Group: EUR […] million, Air Investment 
Valencia: EUR […] million). Each of them has an EU -wide turnover in excess of  
EUR 250 million (Softbank Group: EUR […] million, Air Investment Valencia: 
EUR […] million), but they do not both achieve more than two -thirds of their 
aggregate EU -wide turnover within one and the same Member State.  
(11) The notified operation therefore has an EU dimension pursuant to Article 1(2) of the 
Merger Regulation.  
5. MARKET DEFINITION  
(12) CityJet provides wet and damp lease (ACMI) services and charter flight services. 
CityJet’s charter flight services have largely wound down and charter flights are 
provide d only on a very exceptional basis for […].8  
(13) Air Nostrum provides franchise services, wet and damp lease services and charter 
flight services.  
(14) Fortress Investment Group is active dry leasing services through its subsidiary Falko.  
(15) Dry-leasing, wet  and da mp leasing and franchise services are used by airlines to 
increase capacity. Dry-leasing involves the leasing of an aircraft to an airline, 
                                                                                                                                                      
7  Post-Transaction, CityJet Holdings will eit her cease to exist  or it may continue to be used as a holding 
company under the indirect ownership of Fortress; in any case, it will not be jointly controlling the JV.  
8  Form CO, paragraph 105.  
 
 
4 without crew, maintenance services and insurance. Wet-leasing  to airlines involves 
the leasing of an aircraft to an airline with crew, maintenance and insurance 
(‘ACMI’). A damp lease is very similar to a wet lease. The only difference is that 
with damp leases, the cabin crew are provided by the lessee.  Under a franchise 
agreement, the franchisor airline puts its brand and livery at the disposal of the 
franchisee for use under the franchise agreement. Charter flights services are flights 
operated by an airline on behalf of a third party where the airlines quotes an “all -in” 
cost to the customer. Charter flight  services use the flight numbers of the operating 
airline and all operating costs (fuel, handling, navigation, etc.) are paid for by the 
airline and “bundled” into the price ultimately charged to the customer. The 
customer is generally a non -airline custom er such as travel agency, a tour operator or 
a private/corporate entity such as a sports team.  
(16) In a previous decision, the Commission considered that dry -leasing, wet -leasing and 
franchise services constituted three distinct markets , notably because of th eir 
different characteristics from a demand -side perspective .9 The Commission has also 
considered the market for charter flights  as a distinct market from the market for 
scheduled flights .10  
(17) The Transaction therefore gives rise to horizontal overlaps with respect to (i) wet and 
damp lease services  and (ii) charter flight services. The Transaction also creates 
vertical links with respect to (a) dry-leasing services on the one hand and (i) wet  and 
damp leasing services, (ii) franchise services and (iii) chart er flight services  on the 
other hand  (b) wet -leasing services on the one hand and (i) franchise services and (ii) 
charter flight services, on the other hand . 
5.1. Wet and damp -leasing services  
5.1.1.  Product market definition  
(18) Under a wet -leasing agreement, the lessor  operates the flights using its own air 
operator certificate (AOC) and resources, for which it receives an income from the 
lessee which is usually a fixed price per block hour. This income would be unrelated 
to ticket prices and aircraft load factor. The f lights are flown under the lessee’s code 
and it is the lessee who sells the tickets and provides passenger and ground handling 
services. The commercial risk in a wet lease lies with the lessee, who must generate 
the revenue to cover the cost of the wet -leasing services and other operating costs. 
Wet-leasing would allow for an airline to have an aircraft ready turnkey to fly its 
passengers without investing in the aircraft or crew to operate it.11 
(19) The Parties submit that a damp lease would be very similar to a wet lease. The only 
difference would be that with damp leases the cabin crew would be provided by the 
lessee, not the lessor. The Parties consider damp leases and wet -leases to form part 
of one wet -leasing market. They state that it would only be in inci dental cases that 
customers ask for damp leases and the Parties would have not experienced a request 
for a damp lease so far. In addition, the Parties would not be aware of any wet -
                                                 
9  Case M.9287 – Connect Airways/Flybe , paragraph 211 -213 (t o be published).  
10  In decisions related to scheduled air transport services, the Commission considered, while ultimately 
leaving the question open, that charter flights were not part of the same market as scheduled flights (see 
e.g. cases M.8869 – Ryanai r/Laudamotion , paragraph 154; M.6447 – IAG/bmi , paragraph 74).  
11  Form CO, paragraph 57 et seq. and 76.  
 
 
5 leasing provider which only focuses on damp -leasing. All wet -leasing provid ers 
would be able to provide damp -leasing services if requested by the customer.12   
(20) In its prior decisional practice, the Commission did not specifically examine damp 
lease services.  
(21) The market investigation in this case has not generated any evidence ind icating that 
wet-leasing and damp -leasing services would not be substitutable from the supply 
and the demand side. Respondents have not submitted any comment suggesting that 
a distinction between wet -leasing and damp -leasing would be appropriate.13 
Consider ing that the Parties have never provided damp -leasing services so far and 
that no airline solely provides damp -leasing services, the Parties’ market shares in 
the market for wet -leasing only would not significantly vary. The question of 
whether wet -leasing  and damp -leasing services are part of the same market can be 
left open, since the Transaction is unlikely to raise serious doubts as to its 
compatibility with the internal market in relation to wet and damp leasing services, 
under any plausible product ma rket definition.14 In this decision, the Commission 
will further assess the effects of the Transaction on the hypothetical narrower 
segment for wet -leasing services.  
(22) The Commission has in a previous case considered that wet -leasing services for 
cargo air tr ansport services and wet -leasing services for passenger air transport 
services appear to constitute distinct markets.15 However, since CityJet and Air 
Nostrum only provide wet -leasing services for passenger air transport,16 the 
Commission will only assess th is market segment further in this decision.  
(23) In addition, while ultimately leaving the precise market definition open, the 
Commission has considered in a previous case that the market for the provision of 
wet-leasing services could be segmented according t o aircraft size (seat capacity). 
The Commission has considered distinctions between regional aircraft (aircraft with 
around 30 -90+ seats and a range of less than 2000 nautical miles) and large 
commercial aircraft (aircraft with more than 100 seats and a ra nge greater than 2000 
nautical miles). With regard to large commercial aircraft, a distinction between wide -
body aircraft with 200 -400+ seats and narrow -body aircraft with 100 -200 seats was 
considered. Concerning regional aircraft, the Commission considere d, but ultimately 
left open, a distinction between small regional aircraft with 30 -50 seats and large 
regional aircraft with 70 -90+seats.17  
(24) The Parties submit that, while it would be difficult to draw a particular distinction 
based on aircraft sizes, a pos sible distinction could be made between small aircraft 
                                                 
12  Form CO, paragraph 59 et seq.  
13  See agreed non -confidential minutes of a conference call of 28 June 2019 with a competitor; agreed non-
confidential minutes of a conference call of 8 July 2019 with a competitor;  agreed non -confidential 
minutes of a conference call of 12 July 2019 with a competitor; agreed non -confidential minutes of a 
conference call of 20 June with a customer; agreed non-confidential  minutes of a conference call of 26 
June with a customer; agreed non -confidential minutes of a conference call of 1 July with a customer; 
agreed non -confidential minutes of a conference call of 2 July with a customer.  
14  See sections 6.1, 6.3.2 , 6.3.5 and 6.3.6  below.  
15  Case M.9287 – Connect Airways/Flybe , paragraph 223 (to be published).  
16  Reply to RFI 1 of 10 July 2019, question 3.  
17  Case M.9287 – Connect Airways/Flybe , paragraph 229 (to be published).  
 
 
6 with a seat capacity between 30 -120 seats, middle -sized aircraft with a seat capacity 
between 121 -190 seats and large aircraft with a seat capacity of more than 191 seats. 
Given the various sizes avail able, it would not be possible to draw a clear line 
between regional aircraft and slightly larger narrow -body aircraft with more than 100 
seats. In the Parties’ view, while aircraft with a seat capacity of below 50 would be 
distinct from a demand side pers pective, the aircraft sizes above would become 
substitutable to a significant extent. The Parties explained that, from a demand side 
perspective, airlines would take into account the total cost of production in their 
consideration which aircraft size to we t lease. These costs would include the wet 
lease rate charged by the lessor and all other operating cost for the flight operations. 
Larger aircraft would have a higher trip cost than a smaller unit, but the cost per seat 
would be lower and could be more at tractive to a lessee.18   
(25) From a demand side perspective, the market investigation has indicated that 
customers consider a segmentation between aircraft with a seat capacity of less than 
115 and aircraft with a seat capacity of more than 100. Concerning wet -leasing 
services of regional aircraft, the following  three  possible ways to divide the market 
for wet -leasing services of regional aircraft by seat capacity, were considered by 
customers: (i) under 50 seats; above 50 seats; (ii) 50 -70 seats; 70 -100 seats and (i ii) 
30-70 seats; 70 -100+ seats.19  
 
(26) Considering that the Parties do not operate aircraft of a seat capacity of 50 -70, the 
Transaction would not give rise to an overlap with respect to this hypothetical 
narrower market. It is therefore not necessary to  further assess whether the market 
for wet -leasing services of regional aircraft should be segmented  according to the 
following seat capacities (i)  aircraft with a capacity under 50 seats ; above 50 seats ; 
(ii) 50-70 seats ; 70-100 seats.  
(27) In any event, the  question of whether wet -leasing services should be segmented 
according to the aircraft capacity can be left open for the purpose of this case, since 
the Transaction is unlikely to raise serious doubts as to its compatibility with the 
internal market in re lation to wet -leasing services, under any plausible product 
market definition.20 Nevertheless, considering that the Parties both use regional 
aircraft of a seat capacity between 88 and 100, the Commission will assess the 
effects of the Transaction on the fo llowing markets: the broader market for wet-
leasing services; the segment for wet-leasing services of regional aircraft (with a 
capacity of 30 -90+ seats); the sub -segment large regional aircraft (with a capacity of 
70-90+ seats).  
5.1.2.  Geographic market definiti on 
(28) The Parties consider that the market for wet -leasing services is at least EEA -wide.21   
                                                 
18  Form CO, paragraph 152.  
19  See agreed non -confidential minutes of a conference call of 20 June with a customer, paragraph 7; agreed 
non-confident ial minutes of a conference call of 26 June with a customer, paragraph 5; agreed non -
confidential minutes of a conference call of 1 July wit h a customer, paragraph 5; agreed non -confidential 
minutes of a conference call of 2 July with a customer, paragraph 10.  
20  See sections 6.1, 6.3.2 and 6. 4 below.  
21  Form CO, paragraph 96.  
 
 
7 (29) In a previous decision, the question of whether the market for wet -leasing services is 
EEA -wide or worldwide was left open.22 
(30) The market investigation has indicated th at from a supply -side perspective, the main 
competitors of CityJet and Air Nostrum are only active in the EEA but they could, in 
principle, offer wet -leasing services worldwide.23 From a demand -side perspective, 
airlines purchasing wet -leasing services cons idered that they would purchase the 
services from wet -lessors within the EEA for wet -leases with a duration of more than 
six-seven months because of the current regulatory framework.24 Article 13(3)(b) of 
Regulation no 1008/2008 of 24 September 2008 on comm on rules for the operation 
of air services in the Community limits wet -leasing arrangements between EU air 
carriers and third countries to seven months, renewable once.  
(31) Based on the above considerations, the Commission considers that the geographic 
market for wet -leasing services is at least EEA -wide.  
(32) The question of whether the geographic market for wet -leasing services is EEA -wide 
or worldwide can be left open for the purpose of this case, since the Transaction is 
unlikely to raise serious doubts as its compatibility with the internal market in 
relation to wet -leasing services if an EEA -wide market is considered, which is in any 
case the narrower market.25  
5.2. Charter flight services  
5.2.1.  Product market  
(33) Charter flight is a service where the flight characteristics,  such as dates, times, cities 
of departures and destination, and inflight services, are arranged in accordance with 
the customer’s needs. Charter flights are thus air transport services that take place 
outside normal schedules, normally through an arrangem ent with a particular 
customer (e.g. a tour operator, a sports team).  
(34) In its prior decisional practice, the Commission defined a separate wholesale market 
for airline seats, in which supply is represented by airlines and demand by tour 
operators that purc hase individual seats, block seats or entire flights and integrate 
them in their package holidays. The Commission considered but left open whether 
there is a separate market for the wholesale supply of airline seats by charter 
airlines.26 Considering that t here might be a market for the wholesale supply of 
airline seats to tour operators by charter airlines, it could be argued that the market 
for charter flights could be segmented by customer type. The Parties consider that 
the exact market definition can be  left open, given the small scale of charter services 
offered by the Parties.27 
                                                 
22  Case M.9287 – Connect Airways/Flybe , paragraph 232 (to be publi shed).  
23  See agreed non -confidential minutes of a conference call of 28 June 2019 with a competitor, paragraph 6 
and agreed non -confidential minutes of a conference call of 8 July 2019 with a competitor, paragraph 6.  
24  See agreed non -confidential minutes  of a conference call of 1 July with a customer, paragraph 5 and 
agreed non -confidential minutes of a conference call of 2 July with a customer, paragraph 10.  
25  See sections 6.1, 6.3.2 and 6.4 below . 
26  See e.g. Case M.8046 – TUI/Transat France , paragraph 73.  
27  Form CO, paragraph 95.  
 
 
8 (35) The question of whether charter flight services should be segmented between (i) 
charter flight services to tour operators and (ii) charter flight services for other types 
of cus tomers (private individuals or businesses, such as sports clubs) can be left open 
for the purpose of this case, since the Transaction is unlikely to raise serious doubts 
as to its compatibility with the internal market in relation to charter flight service s, 
under any plausible product market segmentation.28 
5.2.2.  Geographic market definition  
(36) The Parties consider that the market for charter flight services should be defined as 
at least EEA -wide.29 
(37) In its decisional practice relating to the wholesale supply of airline seats to tour 
operators by charter airlines, the Commission considered that the geographic scope 
was national.30  
(38) Considering that there are no regulatory restrictions preventing a charter airline from 
providing services outside from its own country  of establishment, charter flight 
provider can offer services on any route within the EEA. In addition, the cities of 
origin and destination for charter flights are defined by the customer, which selects a 
provider of charter services, indifferent from its  country of establishment. In that 
regard, Air Nostrum and CityJet have provided charter flights to customers in the 
majority of EEA countries.31 A respondent to the market investigation that provides 
charter flights indicated that it provides charter fligh ts on any city -pair within the 
EEA and therefore considers the market for charter flight services as EEA -wide.32 
There are therefore indications that the geographic scope for charter flight services is 
EEA -wide.   
(39) However, the question of whether the geogra phic scope of charter flight services is 
EEA -wide or national can be left open for the purpose of this case, since the 
Transaction is unlikely to raise serious doubts as to its compatibility with the internal 
market in relation to charter flight services, under any plausible geographic market 
segmentation.33 
5.3. Franchise services  
5.3.1.  Product market  
(40) Under a franchise agreement, the franchisee operates with its own aircraft, crew, 
maintenance, insurance and slots, using the brand and livery of the franchisor. The 
franchisee bears the commercial risk, including setting fares, but the franchisor 
markets the route as part of its network and sells the tickets. In return for the use of 
the brand and for the services provided, the franchisee pays a fee to the franchisor. In  
contrast with wet -leasing services, franchise services are hence more akin to 
scheduled services.  
                                                 
28  See sections 6 .2, 6.3.3 and 6.4.2  below.  
29  Form CO, paragraph 100.  
30  See e.g. Case M.8046 – TUI/Transat France , paragraph 88.  
31  Form CO, paragraph 100.  
32  See agreed non -confidential minutes of a conference  call of 12 July with a competitor, paragraph 10.  
33  See sections 6.2, 6.3.3  and 6. 4.2 below.  
 
 
9 (41) In a prior decision, the Commission considered the provision of franchising services 
to other airlines as an input to the operation of passenger air transpo rt services.34 For 
the purpose of the assessment of Transaction, the Commission will consider that dry -
leasing services and wet -leasing services are an input to the operation of franchise 
services.  
5.3.2.  Geographic market  
(42) In a prior decision, the Commission cons idered that the geographic scope for the 
provision of franchise services is EEA -wide.35  
(43) In line with its prior decisional practice, the Commission considers that, for the 
purpose of this case, the geographic scope for the provision of franchise services is  
EEA -wide.  
5.4.  Dry-leasing services  
5.4.1.  Product market definition  
(44) The Commission has , in a previous case considered, while ultimately leaving the 
precise market definition open, that the market for the provision of dry leasing 
services should be segmented accordi ng to aircraft size (seat capacity) . Specifically, 
the Commission  considered distinctions between regional aircraft (aircraft with 
around 30 -100 seats and a range of less than 2000 nautical miles) and large 
commercial aircraft (aircraft with more than 100 seats and a range greater than 2000 
nautical miles). With regard to large commercial aircraft, a distinction between wide -
body aircraft with 200 -400+ seats and narrow -body aircraft with 100 -200 seats was 
considered. Concerning regional aircraft, the Commis sion considered a distinction 
between small regional aircraft with 30 -50 seats and large regional aircraft with 70 -
90+seats.36  
(45) The exact product market definition can however be left open  for the purpose of this 
case, since the Transaction is unlikely to raise serious doubts as to its compatibility 
with the internal market  in relation to dry -leasing services , under any plausible 
market segmentation.37  
5.4.2.  Geographic market definition  
(46) The Parties consider the market to be worldwide, since most leasing companies  
would be active and compete with each other globally. Dry lessors could easily reach 
customers anywhere in the world. Aircraft delivery cost would be minimal and there 
would be no regulatory restrictions in terms of technical specifications that would 
limit the use of certain types of aircraft to a particular continent.38 
                                                 
34  Case M.9287 – Connect Airways/Flybe , paragraph 233 (to be published).  
35  Case M.9287 – Connect Airways/Flybe , paragraph 235 (to be published).  
36  Case M.9287 – Connect Airways/Flybe , paragraphs 215 -219 (to be published).  
37  See sections 6.3 below.  
38  Form CO, paragraph 99.  
 
 
10 (47) The Commission has considered in a previous case that the market for the provision 
of dry -leasing services is worldwide.39 
(48)  In line with its prior practice, the Commission will assess the e ffects of the 
Transaction on a worldwide market for dry -leasing services.  
6. COMPETITIVE ASSESSMEN T 
6.1. Horizontal overlap – wet-leasing services  
(49) The Parties’ activities overlap with respect to the provision of wet -leasing services.  
(50) CityJet currently offers two aircraft types on its wet -lease services: the Avro RJ85 
with 95 seats and the Bombardier CRJ900 with 88/90 seats.40 Air Nostrum currently 
offers the following aircraft types on its wet -leases services: […].41 
(51) While CityJet currently operates 30 aircraft for  wet-leasing services, Air Nostrum 
operate s seven  aircraft. In theory, CityJet could use up to […] aircraft for wet -leasing 
services, while Air Nostrum could use up to […] aircraft for wet -leasing services.42 
Air Nostrum operates most of its fleet (i.e. […] aircraft) under a franchise agreement 
with Iberia.43 This agreement was signed in 1997 for an in itial duration of […] years. 
It is automatically renewed for […] periods unless one of the parties states its will to 
terminate the agreement […] before the expiry of this […] period. The current 
agreement is valid until […]. The operation under the Iberia franchise agreement 
constitute the core of Air Nostrum’s business model .44 By contrast,  wet-leasing 
contracts are usually concluded for short er periods, [confidential information 
regarding the Iberia Agreement]. In addition, the terms of the franchise agreement 
with Iberia require Air Nostrum to use a dedicated fleet with the Iberia livery. 
[confidential information regarding Air Nostrum’s fleet management ] For these 
reasons, the Commission considers that Air Nostrum cannot rely of the […] aircraft 
used for the franchise operation to provide wet -leasing or bid for future tenders for 
wet-leasing services .  
(52) The Parties’ market shares post -Transaction on every pla usible market where the 
Parties’ activities overlap are provided in the table below.  
                                                 
39  Case M.9287 – Connect Airways/Flybe , paragraph 221 (to be published).  
40  Form CO, paragraph 179.  
41  Form CO, paragraphs 150 and 185.  
42  Form CO, paragraph 164.  
43  As indicated in paragraphs 3 and 4 above, CityJet and Air Nostrum have a fleet of respectively 35 and 
approximately 50 aircraft. The Parties submit that the number of CityJet’s aircraft available for wet -
leasing operations corres ponds to its total fleet minus some backup aircraft necessary to guarantee 
CityJet’s overall operations. The number of Air Nostrum’s aircraft available for wet -leasing services 
corresponds to its total fleet minus the aircraft necessary for the Iberia fran chise operations, its charter 
flights operation and backup aircraft necessary to guarantee Air Nostrum’s operations (Form CO, 
paragraph 164).  
44  In 2017, […]% of Air Nostrum’s revenues were generated through the franchise agreement with Iberia 
(email of t he Parties dated 16 July 2019).  
 
 
11 Table 1 - Parties' shares in wet -leasing services in the EEA  [May and July 2019 ]45 
 Wet-leasing 
services  Wet-leasing 
services of regional 
aircraft ( 30-90+ 
seats)  Wet-leasing 
services of large 
regional aircraft 
(70-90+ seats)  
CityJet  [5-10]% [10-20]% [20-30]% 
Air Nostrum  [0-5]% [5-10]% [5-10]% 
Total JV  [5-10]% [20-30]% [20-30]% 
Medops46 [0-5]% [0-5]% [0-5]% 
Total Parties  [10-20]% [20-30]% [30-40]% 
NoRRA 
Nordic/Danish 
Air Transport  [5-10]% [10-20]% [10-20]% 
Regional Jet 
OÜ [0-5]% [10-20]% [10-20]% 
WDL/LGW  [0-5]% [10-20]% [10-20]% 
Source: Form CO, paragraphs 140 and 161 and reply to RFI 1 of 10 July, question 5 .47  
(53) Therefore, the Transaction will give rise to affected  market s with respect to (i) the 
supply of wet -leasing services of regional aircraft in the EEA  and (ii) the sub -
segmentation for wet -leasing services of large regional aircraft with a capacity 
between 70 and 90+ seats .  
(54) However, in both of these affected markets, the combined market share post -
Transaction are moderate ( [20-30]% in wet -leasing of regional aircraft and [30-40]% 
in wet -leasing of large regional aircraft) and the increment is also moderate  ([5-10]% 
with respect to wet -leasing of regional aircraft and [5-10]% with respect to wet -
leasing of large regional aircraft).  
                                                 
45  The Parties submitted that they do not have reliable market data on the number of competitors’ aircraft 
available for wet -leasing services. On a conservative basis, the Parties’ market shares are calculated based 
on thei r own total number of aircraft available to use for wet -leasing services, while the size of the market 
is determined based on the number of aircraft actually used for wet -leasing services. The Parties’ market 
shares would necessarily be lower, if the size of the market was based on the number of aircraft available 
for wet -leasing services (Form CO, paragraphs 162 et seq).  The Parties’ available capacity takes account 
of their potential future plans to lease/acquire aircraft (reply to RFI 4 of 16 July 2019).      
46  Mediterranean Aviation Operations Company, Ltd. (“Medops”) is an airline jointly controlled by Air 
Investment Valencia active in the operation of air routes between Europe and Africa. Medops is focused 
on providing air transportation services to ga s and oil companies, corporate clients and humanitarian 
organizations, mainly through charter flight and wet -lease services. In particular, Medops provides wet -
lease services third parties (3 aircraft) (Form CO, footnote 2).  
47  The Parties have provided ma rket shares based on data from ch-aviation  database  retrieved on 29 May 
2019 and 12 July 2019 .  
 
 
12 (55) In addition, the Parties will continue to face significant competition from other 
established wet -leasing services  providers such as NoRRA Nordic, Regional Jet and 
WDL/LGW , whose market share in wet -leasing services of large regional aircraft are 
respectively [10-20]%, [10-20]% and [10-20]%.48  
(56) There is a significant number of wet -leasing services suppliers in the EEA (78 
suppliers of wet -leasing services to t hird parties, in addition to approximately 20 
providers of in -house wet -leasing services).49 These suppliers of wet -leasing services 
can provide wet -leases across the EEA, considering that there is no regulatory barrier 
for EEA airlines to provide wet -leasing services in the EEA.50  
(57) Barriers to entry into the market for wet-leasing services market and related costs are 
relatively low for airlines already operating scheduled, franchise or charter services, 
since they already possess the necessary resources for  the provision of wet -leasing 
services. For a new airline wishing to enter the market for wet -leasing services, the 
barriers to entry are lower than those for entering the market for scheduled passenger 
air transport services, given that there is no need t o have customer -facing services 
(e.g. sales and marketing services). In that respect, Regional Jet entered the market 
for wet -leasing services of regional aircraft in 2016, following the demise of 
Estonian Airlines, and currently provide wet -leasing servic es to five different 
airlines, operating 19 aircraft.51  
(58) From the demand -side, there are no significant barriers to switching between wet -
lessors. Switching costs seem to be low and most contracts have a limited duration 
(of up to 3 years).52 Airlines can pu rchase wet -leasing services from approximately 
78 providers of wet -leasing services in the EEA.53 The market investigation 
confirmed that airlines tend to have different suppliers of wet -leasing services54 and 
would have no difficulty in switching suppliers.55  
(59) In addition, customers indicated that they consider that the Transaction is unlikely to 
have a negative impact on the competitive situation of the markets for wet -leasing 
services.56 Some customers indicated that the impact of the Transaction might even 
be positive for their companies, as the Transaction might create synergies and 
potentially allow the merged entity to charge lower prices due to cost efficiencies.57 
Competitors indicated that generally, they do not consider that the Transaction 
                                                 
48  Reply to RFI 1, question 5.  
49  Form CO, paragraph 193.  
50  Form CO, paragraph 194.  
51  Form CO, paragraph 205.  
52  Form CO, paragraphs 199 and 212.  
53  Form CO, paragraph 193.  
54  See agreed non -confident ial minutes of a conference call of 26 June with a customer, paragraph 2; agreed 
non-confidential minutes of a conference call of 2 July with a customer, paragraph 2; agreed non -
confidential minutes of a conference call of 28 June 2019 with a competitor, paragraph 10.  
55  See agreed non -confidential minutes of a conference call of 1 July with a customer, paragraph 8.  
56  See agreed non -confidential minutes of a conference call of 20 June with a customer, par agraph 10; 
agreed non -confidential  minutes of a conference call of 26 June with a customer, paragraph 9 ; agreed non -
confidential minutes of a conference call of 1 July with a customer, paragraph 7 ; agreed non -confidential 
minutes of a conference call of 2 July with a customer, paragraph 15.  
57  See agreed non -confidential minutes of a conference call of 1 July with a customer, paragraph 7 ; agreed 
non-confidential minutes of a conference call of 2 July with a customer, paragraph 14.  
 
 
13 would have a negative impact on their companies.58 Some competitors indicated that 
they might have a disadvantage in case an airline launches a tender for a high 
number of aircraft, to which the merged entity would be the only wet -lessor able to 
respond.59 However, the se competitors indicated that tenders for a high number of 
aircraft are infrequent .60 
(60) In light of the above considerations, the Commission concludes that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the internal market in 
relation  to wet -leasing services, under any plausible market definition.  
6.2. Horizontal overlap – charter flight services  
(61) The Parties submit that CityJet and Air Nostrum currently have very limited 
activities and only a couple of aircraft in use for conductin g charter services. While 
Air Nostrum uses […] aircraft for charter services focusing on customers in Spain, 
CityJet’s charter flight services have largely wound down and charter flights are 
provided only on a very exceptional basis  (a few flights per year ) for [name of 
customer] .61  
(62) In order to adopt a conservative approach, the Commission will consider that CityJet 
is active in charter flight services.  
(63) If the geographic market is defined as EEA -wide, the Parties’ activities overlap on 
the broader market f or charter flight services and the narrower market for charter 
flight services for private individuals and businesses (e.g. sports teams). However, 
the Parties’ combined market share post -Transaction will remain below [0-5]%.62  
(64) If the geographic scope for charter flight services is defined as national, the Parties’ 
activities would not overlap given that CityJet is not active in charter flight services 
in Spain  (where Air Nostrum mainly operates)  or in any of the other countries where  
Air Nostrum is  active.63 
(65) The Transaction will therefore not result in any horizontally affected markets and is 
unlikely to raise competition concerns.  
(66) In light of the above considerations, the Commission concludes that the Transaction 
is unlikely to raise serious doubts as to i ts compatibility with the internal market in 
relation  to charter flight services, under any plausible market definition.  
                                                 
58  See agreed non -confiden tial minutes of a conference call of 8 July 2019 with a competitor, paragraph 8; 
agreed non -confidential minutes of a conference call of 28 June 2019 with a competitor, paragraph 10. 
59  See agreed non -confidential minutes of a conference call of 8 July 201 9 with a competitor, paragraph 8; 
agreed non -confidential minutes of a conference call of 12 July with a competitor, paragraph 11.  
60  See agreed non -confidential minutes of a conference call of 8 July 2019 with a competitor, paragraph 8. 
61  [Further infor mation on customer and the routes flown].  Form CO, paragraph 105 and reply to RFI 1 of 10 
July 2019, question 1.  
62  Form CO, paragraph 105 and reply to RFI 2 of 11 July 2019, question 2. Based on the Parties’ estimates, 
approximately 288 airlines provide charter flight services, using 5,469 aircraft. Air Nostrum only uses a 
couple of aircraft for charter flight services. The Parties’ are unable to provide estimates of their market 
shares with respect to the sub -segment for charter flight services to privat e individuals and businesses. In 
any event, the combined market share and the increment would be very limited.   
63  Form CO, paragraph 106 and reply to RFI 2 of 11 July 2019, question 2. For the sake of completeness, the 
Parties confirmed that there would be no overlap on a route -by-route basis.  
 
 
14 6.3.  Vertical relationships  – dry-leasing services  
(67) Fortress Investment Group, through its subsidiary Falko, is active on the market for 
dry-leasing services while the JV will be active on the downstream markets for 
charter flights and wet -leasing services.64 
(68) Therefore, the Transaction gives rise to potential vertical relationships between 
Falko’s activities in the upstream market for dry -leasing services, on the one hand, 
and the Parties’ activities in the downstream markets for (i) charter flight services 
and (ii) wet -leasing services, on the other hand.  
6.3.1.  Overview of Falko’s activities and market shares in dry -leasing services  
(69) Falko has a flee t of […] aircraft available for dry -leasing services, focusing on 
regional aircraft. Its fleet comprises different regional aircraft types with a seat 
capacity between 50 (for Bombardier CRJ100/200 aircraft) to 118 (for the Embraer 
E195 aircraft).65  
(70) Falko  dry-leases […] aircraft to customers in the EEA. Approximately […] of these 
aircraft have a capacity between 70 and 90 seats, the remaining aircraft  having a 
capacity between 90 and 120 seats.66 
(71) Falko’s share in dry -leasing services worldwide is below [0-5]%.67 Its share would 
be well below [5-10]% in any plausible segmentation of dry -leasing services of 
regional aircraft.68 
6.3.2.  Vertical relationship between the Parties’ activities in dry -leasing services and wet -
leasing services  
(72) As explained in section 6.1 above, the Parties’ combined share in wet -leasing 
services only exceeds  30% in one plausible delineation for wet -leasing services  
(namely wet -leasing services of large regional aircraft with a capacity of 70 -90+ 
seats) . Falko’s market share in dry -leasing  services under any plausible market 
delineation is also well below 30%.69  
(73) Considering that Falko’s market share in the upstream market for dry -leasing 
services of regional aircraft would be low (below [5-10]%), the Commission 
considers that the merged ent ity could not have the ability to restrict access to 
regional aircraft (input foreclosure) to airlines providing wet -leasing services in the 
EEA. Considering that the Parties’ market share in the downstream market for wet -
leasing services of regional aircr aft would be moderate ( not exceeding  [30-40]% 
                                                 
64  For the sake of completeness, the Parties indicated that Air Investment Valencia subsidiary Saimer 
provides dry leasing services to other Air Investment Valencia subsidiaries (Form CO, paragraph 222).  
65  Form CO , paragraph 109 et seq.  and reply to RFI 1 of 10 July 2019, question 2 and reply to RFI 2 of 11 
July 2019, question 1.  
66  Form CO, paragraph 105 and reply to RFI 2 of 11 July 2019, question 2.  
67  Form CO, paragraph 109.  
68  Replies to QP 1 of 8 February 2019, question 8 and RFI 2 of 11 July 2019, question 1. The Parties 
indicated that Falko’s share in dry -leasing aircraft with a size between 70 and 90+ seats would be below 
[5-10]% in a geographic market defined as EEA -wide. The Parties submitted that Falko’s share in the 
worldwide market is necessarily lower.  
69  Form CO, paragraph 109 and reply to RFI 2 of 11 July 2019, question 1.  
 
 
15 under any plausible market delineation ) and that numerous airlines provide wet -
leasing services in the EEA, the merged entity would not represent a significant 
customer base for dry -leasing services of regional  aircraft post -Transaction.  
Furthermore, Air Nostrum dry -leases [number of aircraft]  from a third party dry 
lessor. Air Nostrum’s demand thus represents [less than 10] % of the EEA or 
worldwide market for dry -leased aircraft.70 As a result, there is no risk that the 
merged entity will restrict access of dry -lessors to the downstream markets for wet -
leasing services post -Transaction (customer foreclosure).  
(74) In light of the above considerations, the Commission concludes that the Transaction 
is unlikely to raise  serious doubts as to its compatibility with the internal market in 
relation to the vertical eff ects in the market for dry -leasing  services and wet -leasing 
services, under any plausible market definition.  
6.3.3.  Vertical relationship between the Parties’ activiti es in dry -leasing services and 
franchise services  
(75) The Parties’ combined share in franchise services are below 30% under any 
plausible market delineation.71 Falko’s  market share in dry -leasing services under 
any plausible market delineation is also well below 30%.72  
(76) The Transaction will therefore not result in any vertically affected markets with 
respect to dry -leasing services and franchise services .  
(77) In light of th e above considerations, the Commission considers that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the internal market in 
relation to the vertical effects in the markets for dry -leasing services and franchise 
services,  under any plausible market definition.  
6.3.4.  Vertical relationship between the Parties’ activities in dry -leasing services and 
charter flight services  
(78) As explained in section 6.2 above, the Parties’ combined share in charter flight 
services are below 30% under a ny plausible market delineation. Falko’s market 
share in dry -leasing services under any plausible market delineation is also well 
below 30%.73  
(79) The Transaction will therefore not result in any vertically affected markets with 
respect to dry -leasing services  and charter flight services .  
(80) In light of the above considerations, the Commission considers that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the internal market in 
relation to the vertical effects in the markets for d ry-leasing services and charter 
flight services, under any plausible market definition.  
                                                 
70  Form CO, paragraph 110.  
71  Reply to RFI 3 of 15 July 2019, question 2.  
72  Form CO, paragraph 109 and reply to RFI 2 of 11 July 2019, question 1.  
73  Form CO, paragraph 109 and reply to RFI 2 of 11 July 2019, question 1.  
 
 
16 6.3.5.  Conclusion  
(81) In light of the above considerations, the Commission concludes that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the int ernal market due 
to the vertical links between the activities of Fortress Investment Group in the 
market for dry -leasing services, on the one hand, and the JV’s activities in the 
markets for (i)  wet-leasing services, (ii) franchise services and (iii)  chart er flight 
services , on the other hand.  
6.4. Vertical relationships – wet-leasing services  
(82) CityJet and Air Nostrum are active in wet -leasing services, while the JV will be 
active on the downstream markets for franchise services and charter flights.  
(83) Therefore, th e Transaction gives rise to potential vertical relationships between the 
Parties’ activities in the upstream market for wet -leasing services, on the one hand, 
and the Parties’ activities in the downstream markets for (i) franchise services and 
(ii) charter  flight services, on the other hand.  
6.4.1.  Vertical relationship between the Parties’ activities in wet -leasing services and 
franchise services  
(84) As explained in section 6.1 above, the Parties’ combined share in wet -leasing 
services only exceeds 30% in one plausib le delineation for wet -leasing services 
(namely wet -leasing services of large regional aircraft with a capacity of 70 -90+ 
seats). The Parties’ combined share in franchise services are below 30% under any 
plausible market delineation.74 
(85) Considering that the Parties’ combined market shares in the upstream market for 
wet-leasing services would be moderate (not exceeding [30-40]% under any 
plausible market delineation) and that numerous airlines provide wet -leasing services 
in the EEA, the merged entity could no t have the ability to restrict access to wet -
leasing services (input foreclosure) to airlines providing franchise services in the 
EEA. Considering that the Parties’ market share in the downstream market for 
franchise services would be moderate (below 30% u nder any plausible market 
delineation) and that Air Nostrum only purchases wet -leasing services to cover ad 
hoc specific capacity needs that may arise in the context of the Iberia franchise 
agreement, the merged entity would not represent a significant cus tomer base for 
wet-leasing services post -Transaction.75 As a result, there is no risk that the merged 
entity will restrict access of wet -lessors to the downstream markets for franchise 
services post -Transaction (customer foreclosure).  
(86) In light of the above  considerations, the Commission concludes that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the internal market in 
relation to the vertical effects in the market for wet -leasing services and franchise 
services, under any  plausible market definition.  
                                                 
74  Reply to RFI 3 of 15 July 2019, question 2.  
75  See email of the Partie s dated18 July 2019. In addition, customers of wet -leasing services are not confined 
to airlines providing franchise services, but also airlines providing scheduled passenger air transport and 
charter flight services.  
 
 
17 6.4.2.  Vertical relationship between the Parties’ activities in wet -leasing services and 
charter flight services  
(87) As explained in section 6.1 above, the Parties’ combined share in wet -leasing 
services only exceeds 30% in one plausible  delineation for wet -leasing services 
(namely wet -leasing services of large regional aircraft with a capacity of 70 -90+ 
seats). As explained in section 6.2 above, the Parties’ combined share in charter 
flight  services do not exceed [0-5]% under any plausib le market delineation.  
(88) Considering that the Parties’ combined market shares in the upstream market for 
wet-leasing services would be moderate (not exceeding [30-40]% under any 
plausible market delineation) and that numerous airlines provide wet -leasing ser vices 
in the EEA, the merged entity could not have the ability to restrict access to wet -
leasing services (input foreclosure) to airlines providing charter flight services in the 
EEA. Considering that the Parties’ market share in the downstream market for 
charter flight services are low (not exceeding [0-5]%) and that numerous airlines 
provide charter flight services in the EEA, the merged entity would not represent a 
significant customer base for wet -leasing services post -Transaction.76 As a result, 
there i s no risk that the merged entity will restrict access of wet -lessors to the 
downstream markets for charter flight services post -Transaction (customer 
foreclosure).  
(89) In light of the above considerations, the Commission concludes that the Transaction 
is unli kely to raise serious doubts as to its compatibility with the internal market in 
relation to the vertical effects in the market for wet -leasing services and charter flight 
services, under any plausible market definition.  
6.4.3.  Conclusion  
(90) In light of the above co nsiderations, the Commission concludes that the Transaction 
is unlikely to raise serious doubts as to its compatibility with the internal market due 
to the vertical links between the activities of the Parties in the market for wet -leasing 
services, on the one hand, and the JV’s activities in the market for (i) franchise 
services and (ii) charter services, on the other hand.  
7. CONCLUSION  
(91) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commiss ion 
                                                 
76  In addition, customers of wet -leasing se rvices are not confined to airlines providing charter flight services, 
but also airlines providing scheduled passenger air transport and wet -leasing services.