AA and BA Target of UK Anti-Competition Investigation

UK Anti-Competition Investigation

AA and BA Target of UK Anti-Competition Investigation

On October 11, 2018, the Competition and Markets Authority in the United Kingdom opened an investigation that involves American Airlines, Finnair, British Airways, and Iberia, all members of the One World alliance.  The announcement put out by the Competition and Markets Authority states, “On 11 October 2018, the Competition and Markets Authority (CMA) launched a competition investigation into the Atlantic Joint Business Agreement.”

The announcement further states, Following an investigation under EU competition law, in 2010 the European Commission accepted commitments from the parties in relation to 6 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 years.”

The Authority is looking to examine the control of the take-off and landing slots at Heathrow Airport (LHR).  This function has typically been handled by the European Commission, but as the United Kingdom continues examining the results of Brexit, it has begun to examine the control it will yield on this subject.

According to Bloomberg:

The regulator plans to reassess a 2010 agreement with American Airlines, brokered by the European Commission, that saw the surrender of operator slots to rivals at London’s Heathrow and Gatwick airports. The deal, which is set to expire after 10 years, was put in place to address competition concerns on routes from London to the U.S.

International Consolidated Airlines Group SA, BA and Iberia’s parent company, said Thursday that it’s noted the CMA’s announcement and will respond to the review.

“The CMA has typically been fairly risk-averse, fairly mainstream,” said Pablo Ibanez Colomo, associate professor of law at the London School of Economics. “They’re saying that the thrust of the case concerns the U.K. and Heathrow, so we’re better placed than anyone else.”

The announce specifically states that the investigation does not assume that the Atlantic Joint Business Agreement does not infringe on competition laws.  However, the Authority’s investigation could determine that it does in fact violate competition laws, which would likely lead the commission to take action.

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