CMA launches investigation into British Airways transatlantic joint venture

CMA launches investigation into British Airways transatlantic joint venture

The Competition & Markets Authority has launched a competition investigation into the Atlantic Joint Business Agreement between American Airlines, British Airways, Iberia, and Finnair.

The deal, first signed in 2008, established a revenue sharing joint venture covering all passenger routes between Europe and North America between the carriers.

It was subsequently amended when other airlines have become parties.

In line with the approach of the European Commission, which first investigated the agreement during 2009 to 2010, the investigation is being conducted under the rules on agreements restrictive of competition.

Following an investigation under EU competition law, in 2010 the European Commission accepted commitments from the parties in relation to six routes to address potential competition concerns: London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami.

ADVERTISEMENT

These included a commitment to make landing and take-off slots available to competitors at either London Heathrow airport or London Gatwick airport.

These commitments were binding for ten years.

On expiry of the parties’ commitments, due in 2020, the European Commission may re-assess the agreement, but there is no requirement for it to do so.

As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the CMA has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments.

“This case is at an early stage and no assumption should be made that the Atlantic Joint Business Agreement infringes competition law,” the CMA said in a statement.

International Airlines Group, owner of British Airways and Iberia, said it has noted the announcement and would respond to its review.

“Since 2010, British Airways and Iberia’s transatlantic joint business with American Airlines and Finnair has been bringing significant benefits to millions of travellers,” the airline owner said in a statement.

“It provides them with improved access to cheaper fares and easier journeys to more destinations.

“During this period the joint business has launched 45 new routes including 14 between the UK and US.

“Also, the airlines are able to align their flight schedules and frequencies to enhance customers’ travel choices.”