UK Watchdog To Investigate Trans-Atlantic Alliance

October 11, 2018

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The UK’s Competition and Markets Authority has launched an investigation into the trans-Atlantic partnership between three IAG carriers and American Airlines.

UK Watchdog To Investigate Trans-Atlantic Alliance

The airlines in the Atlantic Joint Business Agreement are American Airlines, British Airways, Iberia, and Finnair. The CMA investigation is being conducted under restriction of competition rules.

The partnership agreement covers cooperation between the airlines on specific routes, in areas such as pricing, capacity, schedules coordination, and revenue sharing.

The airlines in the original agreement signed in 2009 - American, BA and Iberia - were investigated under EU competition law after Virgin Atlantic raised concerns on seven trans-Atlantic routes.

The routes in question were London to Dallas, Boston, Miami, Chicago and New York; and Madrid to Miami and Chicago. The European Commission found that concerns over Madrid-Chicago were not justified.

In 2010 the Commission accepted commitments from the three airlines to address potential competition concerns on the six remaining routes.

The commitments included making take-off and landing slots available to competitors at either London Heathrow or London Gatwick airport. The airlines were bound by the commitments for a period of 10 years.

As the agreement is due to expire, CMA said the European Commission may re-assess the agreement, but with five of the six routes originating in the UK, the CMA said it had decided to review the competitive impact of the agreement.

Britain is due to leave the European Union in March 2019 and the Commission will have no responsibility for UK competition policy beyond that date.