3rd UPDATE: EU Opens Antitrust Cases Into Airline Cooperation
April 20 2009 - 12:26PM
Dow Jones News
European regulators said Monday they had opened formal antitrust
probes into members of two of the three global airline
alliances.
The move follows months of informal talks between the European
Commission and members of the Star and Oneworld alliances, amid
intensifying scrutiny of industry tie-ups on both sides of the
Atlantic.
The commission is unlikely to disband the alliances or fine
members, according to people briefed on its plans, but may curb
some of their existing and planned cooperation on routes, fares and
marketing.
It said it suspects that some airlines under the broader Star
and Oneworld banners may have cooperated too closely on pricing and
capacity.
Commission spokesman Jonathan Todd said that it was
investigating the matter as a matter of priority to "assess whether
there is a violation of antitrust rules."
The Brussels-based commission targeted four Star members - Air
Canada (AC.A.T), Continental Airlines Inc. (CAL), Deutsche
Lufthansa AG (LHA.XE) and the United Airlines unit of UAL Corp.
(UAUA).
The second investigation is into a proposed pact between members
of the Oneworld Alliance, singling out AMR Corp.'s (AMR) American
Airlines, British Airways Plc (BAY.LN) and Iberia Lineas Aereas de
Espana SA (IBLA.MC).
The commission said the level of cooperation within the targeted
alliances "appears far more extensive than the general cooperation
between these airlines and other airlines which are part of the
Star and Oneworld alliances."
One person briefed on its plans noted a formal probe was
required before the commission could advance and seek any remedies,
such as asking airlines to give up routes.
The third global alliance, SkyTeam, is already the subject of a
formal Commission probe launched in 2006, with members including
Delta Air Lines Inc. (DAL) and Air France-KLM (AF.FR) "testing"
potential remedies to the regulator's concerns.
Star members recently won tentative approval from U.S.
regulators to expand their cooperation to include the planned
transfer of Continental from SkyTeam later this year.
BA, American and two other Oneworld members are seeking an
antitrust exemption from U.S. regulators.
"This is a normal part of the E.U. process of examining our
antitrust immunity application with American Airlines and Iberia,"
British Airways said in a statement.
Lufthansa said the company is in "constructive talks" with the
commission, and aims to implement the broader Star pact as quickly
as possible.
The other U.S. airlines involved in the probes said they were
reviewing the commission statement.
Airline regulators have already fined airlines more than $1.5
billion for operating cartels related to fuel surcharges levied by
passenger and cargo airlines.
-By Peppi Kiviniemi and Doug Cameron, Dow Jones Newswires; +32
(0)2 741 1483; peppi.kiviniemi@dowjones.com