EU regulators give three airlines anti-trust warning

3rd October 2009, Comments 0 comments

The warning comes in response to an agreement signed by British Airways, American Airlines and Spain's Iberia to cooperate on flights between North America and Europe.

Brussels -- The EU competition regulator said on Friday that it has warned British Airways, American Airlines and Spain's Iberia over agreements on transatlantic routes which could breach anti-trust rules.

The rival Virgin Atlantic airline immediately welcomed the warning to what it termed a "monster monopoly", but BA said it had expected the move and now looked forward to overcoming the EU's concerns.

The regulator, the European Commission, said that it had sent a "statement of objections" last month to the three companies, which are all members of the oneworld airline alliance.

The action concerns agreements between them "regarding the coordination of the parties' commercial, operational and marketing activities in relation to passenger traffic on transatlantic routes," it said in a statement.

"The commission considers (the accords) may be in breach of European rules on restrictive business practices," it said.

"Pursuant to these agreements, the parties intend to jointly manage schedules, capacity and pricing, as well as share revenues on transatlantic routes between North America and Europe," the statement added.

The three airlines said on August 14 last year that they had signed an agreement to cooperate on flights between North America and Europe to help them to overcome soaring fuel costs.

The venture between American Airlines, BA and Iberia came as British Airways and Spain's national carrier also discussed separate plans for a multi-billion-dollar merger.

The commission also said that a parallel investigation into four members of the Star Alliance, as well as a probe of some participants in the Skyteam group, are also continuing.

British Airways said it had been expecting the move and looked "forward to the opportunity to address and overcome the EU's concerns", noting that oneworld carries less traffic out of Britain than the two other alliances.

"We believe the quickest way to robust competition and more travel choices for consumers is to ensure that all three global airline alliances can compete on an equal footing," it said in a statement.

Virgin Atlantic chief Steve Ridgway welcomed the commission move as "absolutely justified".

He alleged in a statement: "This alliance between BA and AA 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."

He said: "A tie-up between BA and AA is bad news for competition and bad news for the consumer."

A "statement of objections" is a formal step in antitrust investigations.

Under the procedure, the commission informs the parties in writing of the objections raised against them. They can reply in writing setting out their defence, and can also request an oral hearing to present their case.

Brussels can then take a decision on whether their conduct breaks any rules.


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