UPDATE: EU Sends Antitrust Charges To Oneworld Alliance
October 02 2009 - 7:05AM
Dow Jones News
The European Commission Friday confirmed it had sent anti-trust
charges to British Airways PLC (BAY.LN), the American Airlines unit
of AMR Corp. (AMR) and Spain's Iberia Lineas Aereas de Espana SA
(IBLA.MC) over their oneworld transatlantic alliance.
The commission is concerned the companies' plans to increase
cooperation on passenger air transport services on transatlantic
routes may restrict competition and raise prices for consumers.
BA and American have twice tried and failed to secure anti-trust
immunity to coordinate fares and schedules across the Atlantic as
part of their oneworld alliance.
Anti-trust immunity would give the airlines parity with members
of the rival Star and SkyTeam airline groupings, which are allowed
by regulators to negotiate schedules and prices.
The oneworld airlines argue that they should be allowed to
jointly manage schedules, capacity and pricing, as well as share
revenues, to deliver improved services to consumers.
British Airways and Iberia in identical statements said they had
received the commission's charges, or statement of objections, to
their anti-trust application and looked forward to the "opportunity
to address and overcome the (European Union's) concerns."
They added, "The E.U.'s thorough review of our plans and
supporting evidence was anticipated and is similar to its
continuing review of the Star and Skyteam alliances, which already
have anti-trust immunity from the U.S. Department of
Transportation."
The three carriers also are awaiting a decision by U.S.
regulators, which is expected by the end of October.
"We believe the quickest way to robust competition and more
travel choices for consumers is to ensure that all three global
airline alliances can compete on an equal footing," BA and Iberia
said.
"We merely want the same legal status to enable us to strengthen
real competition for the benefit of consumers," the airlines
added.
Virgin Atlantic, a fierce rival of BA, warned a tie-up would be
bad news for competition and for consumers. Chief Executive Steve
Ridgway said the alliance between BA and AA, if given the go-ahead,
will allow them "to increase their stranglehold at Heathrow by
setting prices and agreeing schedules."
Virgin Atlantic would continue to set out its concerns in order
to "demonstrate clearly to the European Commission the irreversible
damage to competition this alliance would have on arguably the most
important aviation markets in the world," he added.
The commission already has active investigations into similar
cooperation deals between four Star Alliance members, Deutsche
Lufthansa AG (LHA.XE), Continental Airlines Inc. (CAL), UAL Corp.'s
(UAUA) United Airlines and Air Canada (AIDIF), and Skyteam members
Air France-KLM (AF.FR) and Delta Air Lines Inc. (DAL).
-By Peppi Kiviniemi, Dow Jones Newswires; +3227411483;
peppi.kiviniemi@dowjones.com; Kaveri Niththyananthan, Dow Jones
Newswires; 4420 7842 9299; kaveri.niththyananthan@dowjones.com