The European Commission has given the go-ahead for British Airways to enter a joint business agreement with American Airlines after the companies agreed to competition safeguards.
The approval gives the airlines immunity from anti-trust laws that would have prevented them from combining their transatlantic wings. The airlines will now pool revenues, work together on ticketing and co-ordinate schedules.
The strengthening of their Oneworld Alliance on European to North American routes allows them to better compete with rival groups, BA has argued.
In order to ease competitive concerns about the deal,the airlines will give up four lucrative transatlantic take-off and landing slots between London airports Heathrow or Gatwick and Boston, Dallas and Miami. Three more pairs between London and New York's JFK will be surrendered if services on the route drop below current levels.
Other concessions include allowing access to their frequent-flyer programmes on those routes and submitting data on their cooperation plan to the Commission. The commitments are for 10 years.
The Commission yesterday said the concessions were enough and that it was dropping a competition investigation launched in April 2009. The airlines anticipate that they will receive the final decision on transatlantic anti-trust immunity from the US Department of Transportation (DOT) shortly.
Commenting on the news, British Airways chief executive Willie Walsh said: “We await the DOT’s final decision but welcome this important and vital step forward. The high number of new services on London to US routes since the Open Skies agreement demonstrates that Heathrow is open. Between us, we have agreed to make available Heathrow slot pairs for our competitors to use on services to the US.
“This is a pragmatic decision so that we can get the joint business up and running as soon as possible. The slot commitments provide a further guarantee that there will be no possible loss of competition as a result of our joint business.”
The airlines plan to launch the transatlantic joint business this autumn.
The Commission has also approved BA's plans to merge with Spanish carrier Iberia—also involved in the Oneworld Alliance—to create one of the world's biggest airlines.
The merger will create Europe's third-largest carrier and is aimed at helping both carriers cut costs as the airline industry struggles to make money.
The new company will be called International Airlines Group, but the BA and Iberia brands will continue to operate as normal.
The Commission said the combined BA and Iberia would not significantly impede competition in the European Economic Area.
