EC opens antitrust investigation into BA and AA alliance
Published: 01 Sep 2008
The European Commission has opened an antitrust investigation into a revenue-sharing deal between British Airways, American Airlines and Iberia. It is not a merger investigation and has no specific deadline.
The BA alliance with AA will allow the two carriers to agree fares, routes and schedules together. The move will also include Spain's Iberia, which is merging with BA.
As per the information available, it is understood that the Commission' preliminary investigation has been under way since July - a month before the three airlines announced their deal - and was not, therefore, prompted by any complaint.
An official has been quoted as saying: "There are no specific deadlines but we will try to come to a conclusion as soon as possible. If airlines which normally compete get together we have to make sure it is not to the detriment of consumers."
Virgin Atlantic, which has voiced concern about the deal, has welcomed the European Commission's decision is to open an investigation.
Steve Ridgway chief executive of Virgin Atlantic said: "The European Commission have rightly begun an investigation, under their own initiative, because they understand that consumers will be worse off if this alliance proceeds. The proposals would create a monster monopoly, which would mean that BA/AA and Iberia would be way too dominant on key routes into and out of Heathrow airport."
"The European Commission will also be aware that the fragile state of the European economy is no excuse for BA/AA to be given the go ahead, as we all know that monopolies never work in the consumers favor, in good times or bad."
BA/AA and Iberia would control nearly half of all slots at London Heathrow and would operate between 63 percent and 80 percent of all flights between Heathrow and key cities in the US, such as JFK, Chicago, Boston and Miami.
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