UK CMA to investigate BA, Iberia, American and Finnair Atlantic joint business agreement

The UK Competition and Markets Authority (CMA) is to investigate the Atlantic joint business agreement between American Airlines, members of International Airlines Group (British Airways and Iberia) and Finnair.

The move it says is in line with the approach of the European Commission when it first investigated the agreement during 2009 to 2010, and it 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 belly routes to address potential competition concerns: London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami.

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 10.

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 belly routes are 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 the CMA said no assumption should be made that the Atlantic joint business agreement “infringes competition law”.

The CMA said it is liaising with the European Commission and the United States Department of Transportation in relation to the investigation.

International Airlines Group (IAG) said it noted the CMA announcement and will respond to its review.

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