The European Union has written to American Airlines, British Airways (BA) and the Spanish carrier Iberia to express concern that the three airlines' plan for a partnership on transatlantic flights would be in breach of antitrust regulations.
Utilizing the U.S./EU "Open Skies" agreement the three carriers, members of the 10-strong Oneworld global airline alliance, are looking to strengthen their ties in order to jointly market and operate transatlantic flights.
As the
Telegraph reports the objections raised by the EU relate to more than just the dominance of key routes the carriers would enjoy. The have also alluded to concerns over how the carriers would "jointly manage schedules, capacity and pricing, as well as share revenues".
Apparently, if the partnership were to be approved, it would operate all flights from London Heathrow to Dallas Fort Worth, 80 per cent of flights from Heathrow to Boston and 70 per cent of the flights to Miami.
Reuters reports that the three airlines have already submitted an application to the U.S. government for antitrust immunity in respect of their planned transatlantic partnership.
Two other airline alliances, also under investigation by the EU in respect of possible breaches of antitrust rules regarding pricing and revenue, have been granted antitrust immunity by the U.S. authorities. They are the Star Alliance - its membership includes Air Canada, United Airlines, Singapore Airlines, German carrier Lufthansa and very soon Continental Airlines - and SkyTeam - Air France-KLM, Delta Air Lines and Aeroflot are some of its members.
Within the Star Alliance it would be Air Canada, United, Lufthansa and Continental looking to partner for transatlantic flights and for SkyTeam it would be Air France-KLM and Delta Air Lines, the latter being the world's largest airline.
And the fact that the other two alliances have their antitrust immunity from the U.S. has led BA to complain that there is not a "level playing field".
MSN and
Reuters provide details of the statements issued by American Airlines and BA in response to the EU's objections to their link-up. The statements read:
We look forward to the opportunity to address and overcome the EU's concerns, especially given the substantial benefits for consumers that would result from our trans-Atlantic joint business
Virgin Atlantic, 49 per cent owned by Singapore Airlines, supports the EU in its stance, Virgin Chief Executive Steve Ridgway stating:
This alliance between British Airways and American Airlines is a monster monopoly which, if given the go-ahead, will allow these dominant carriers to increase their stranglehold at Heathrow by setting prices and agreeing schedules
Martin Bechtold, an antitrust lawyer with the international law firm Allen & Overy, said that EU concerns probably center around monopolies being created on certain routes and fewer flights to some destinations. Cooperating with competitors and relinquishing airport slots may persuade the EU that allowing partnerships such as that between American, BA and Iberia would not jeopardize competition but would result in greater efficiencies.
