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EU is Investigating British Airways/American Airlines Venture

October 2, 2009 By: Jena Tesse Fox

The European Commission has expressed concerns over the proposed transatlantic venture between British Airways, American Airlines and Iberia, specifically regarding the hold the three airlines would have on various Europe-to-U.S. routes, including London Heathrow to Miami and Dallas.

The confidential legal document marks the start of negotiations between the regulators in Brussels and the three airlines. Lawyers for the airlines now have the chance to respond before a competition decision is made.

The Oneworld alliance members are endeavouring to operate as a joint business on flights between the EU and North America, which would allow them to cooperate on pricing and schedules. If the plan is to go ahead, they will also need approval from both U.S. and EU regulators.

The Commission also confirmed that it was still looking into similar plans for co-operation by Star Alliance members Lufthansa, Continental, United and Air Canada and between Skyteam members Air France/KLM and Delta/Northwest.

The plans of Star Alliance and Skyteam have already received approval from the U.S. Department of Transportation.

BA has issued a statement responding to the EU document saying it was, “looking forward to the opportunity to address and overcome the EU’s concerns”.

“Our joint business would benefit millions of customers with greater access to discounted fares, more convenient connections and better access to a global network of more than 500 destinations,” it added.

BA already operates with Qantas on flights to Australia and with Iberia on flights to Spain, neither of which needed regulatory approval.

BA and AA failed in their previous attempts to form joint ventures in 1997 and in 2001 after regulators insisted they divest a large number of Heathrow slots. This time, BA is arguing that the “extraordinarily tough market” means that a tie-up is necessary in its battle for survival.

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