26 Oct 2009 12:07am
Antitrust threat to Atlantic air alliance
By Mark Mulligan in Madrid
Financial Times
European regulators have told British Airways, American Airlines and Spain’s Iberia that they could be forced to give up valuable take-off and landing slots if they want their long-planned transatlantic tie-up to go ahead.
According to documents seen by the Financial Times, the European Commission says that the agreement the three airlines signed last year is “likely to result in appreciable competitive harm” on seven Europe/US routes.
Brussels says it “envisages issuing a decision finding that the series of agreements signed have been in breach” of competition laws and would order the “infringements” ended. “Remedies may include . . . the transfer of airport slots” to other carriers, it says.
The routes in question are the lucrative London-New York services, where authorities say the planned alliance would give BA and AA enough power to raise first and business-class fares. Brussels also has concerns about services between London and Dallas, Boston, Miami and Chicago, as well as the Madrid-Miami and Madrid-Chicago routes.
In the case of the Madrid-Miami service, the authorities dismiss arguments by Iberia that it would consider scrapping its non-stop services to the US city if the joint venture did not go ahead. “Iberia and AA have each been operating non-stop services on this route since before 1997, without any in-depth co-operation,” they say.
Brussels’ concerns are set out in a confidential “statement of objections” sent three weeks ago to the airlines, which have been given a month to respond.
The carriers, which belong to the OneWorld alliance, have also sought antitrust immunity from the US Department of Transportation to allow them to coordinate fares and schedules without fear of penalties.
The DoT, which is set to issue its preliminary response this week, has already granted such immunity to Star and SkyTeam, OneWorld’s rival alliances.
The planned tie-up between BA, AA and Iberia would significantly deepen the OneWorld alliance by permitting co-ordinated flight schedules, co-operation on fares and marketing and shared revenues.
The airlines claim that the financial benefits of the new agreement would lead to lower fares, improved scheduling and new transatlantic services.
Their opponents maintain that the proposed tie-up would create a monopoly at London’s Heathrow airport.
Iberia said Sunday night that the three airlines were “satisfied that they could address the concerns of the commission”.
AA said: “We look forward to the opportunity to address and overcome the EU’s concerns.”
BA could not be immediately reached for comment.
Antitrust threat to Atlantic air alliance
By Mark Mulligan in Madrid
Financial Times
European regulators have told British Airways, American Airlines and Spain’s Iberia that they could be forced to give up valuable take-off and landing slots if they want their long-planned transatlantic tie-up to go ahead.
According to documents seen by the Financial Times, the European Commission says that the agreement the three airlines signed last year is “likely to result in appreciable competitive harm” on seven Europe/US routes.
Brussels says it “envisages issuing a decision finding that the series of agreements signed have been in breach” of competition laws and would order the “infringements” ended. “Remedies may include . . . the transfer of airport slots” to other carriers, it says.
The routes in question are the lucrative London-New York services, where authorities say the planned alliance would give BA and AA enough power to raise first and business-class fares. Brussels also has concerns about services between London and Dallas, Boston, Miami and Chicago, as well as the Madrid-Miami and Madrid-Chicago routes.
In the case of the Madrid-Miami service, the authorities dismiss arguments by Iberia that it would consider scrapping its non-stop services to the US city if the joint venture did not go ahead. “Iberia and AA have each been operating non-stop services on this route since before 1997, without any in-depth co-operation,” they say.
Brussels’ concerns are set out in a confidential “statement of objections” sent three weeks ago to the airlines, which have been given a month to respond.
The carriers, which belong to the OneWorld alliance, have also sought antitrust immunity from the US Department of Transportation to allow them to coordinate fares and schedules without fear of penalties.
The DoT, which is set to issue its preliminary response this week, has already granted such immunity to Star and SkyTeam, OneWorld’s rival alliances.
The planned tie-up between BA, AA and Iberia would significantly deepen the OneWorld alliance by permitting co-ordinated flight schedules, co-operation on fares and marketing and shared revenues.
The airlines claim that the financial benefits of the new agreement would lead to lower fares, improved scheduling and new transatlantic services.
Their opponents maintain that the proposed tie-up would create a monopoly at London’s Heathrow airport.
Iberia said Sunday night that the three airlines were “satisfied that they could address the concerns of the commission”.
AA said: “We look forward to the opportunity to address and overcome the EU’s concerns.”
BA could not be immediately reached for comment.
