The Competition and Markets Authority (CMA) is investigating the long-term wet lease arrangement between airlines Aer Lingus and CityJet and could launch a merger inquiry.
An initial enforcement order under the Enterprise Act 2002 has been served on Aer Lingus, its parent company International Airlines Group (IAG) and Irish regional carrier CityJet.
The CMA says it has “reasonable grounds” for suspecting that arrangements are in progress which would result in the two firms’ assets “ceasing to be distinct”.
A wet lease agreement is when one airline provides an aircraft, its maintenance, insurance and crew to another.
The CMA’s order does not prohibit the airlines from operating under the wet lease agreement during the course of the investigation.