EU opens probe into 3 airline tie-up
The European Commission has opened an antitrust probe into a revenue-sharing deal between British Airways PLC, American Airlines and Spain's Iberia SA, a spokesman said on Friday.
By Agencies |
BRUSSELS : The European Commission has opened an antitrust probe into a revenue-sharing deal between British Airways PLC, American Airlines and Spain's Iberia SA, a spokesman said on Friday.
EU spokesman Jonathan Todd said the investigation _ to see whether the tie-up between the airlines violates competition rules had been opened by regulators and did not arise from any complaints filed.
``It is not a merger investigation and has no specific deadline,'' Todd said, but added EU officials will conclude their investigation as soon as possible.
If approved, the airlines will set prices together and share seat capacity on trans-Atlantic flights.
The pact is the closest alliance the trio can form under strict U.S. airline ownership laws that all but rule out a full merger. It follows two earlier failed attempts by BA and AMR Corp.'s American to forge closer ties.
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Rival carrier Virgin Atlantic claims the deal will seriously damage the competitiveness of the lucrative trans-Atlantic route and increase fares for passengers. ``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,'' said Virgin Atlantic chief executive Steve Ridgway. ``We all know that monopolies never work in the consumer's favor.''
The three airlines argue that their tie-up, which includes the fellow oneworld alliance members Finnair and Royal Jordanian, would allow them to compete more effectively with other major airline alliances Star and SkyTeam, which already have antitrust immunity on trans-Atlantic flights.
BA and AMR Corp.'s American Airlines have failed in the past to win an exemption from U.S. competition laws to work more closely together because of their dominance at London's Heathrow, where the pair have more than half the capacity to and from the United States.
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An exemption from the anti-competition laws would allow BA and American to run their trans-Atlantic operations as a single company, with cooperation on pricing and schedules adding to the flight capacity and airline facilities they already share in the oneworld alliance. Download
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