Hello and welcome to the The Atlantic Update for Wednesday 17 October 2018, our weekly bulletin on transatlantic travel between Europe and North America.
Eyebrows were raised last week when the Competitions & Markets Authority announced an investigation into the transatlantic joint-venture between American Airlines, BA, Iberia and Finnair.
Given the history of the airline industry and cartel activity, you would be forgiven for thinking something was untoward.
However, the reality was more mundane than that.
In 2010, the airlines secured regulatory approval from the European Commission and the US Department of Transportation to operate an immunised joint-venture. This covers all flights between Europe and North America and allows the airlines to co-ordinate routes, schedules and fares.
This was a long held ambition of BA and American. They had twice previously attempted to secure regulatory approval. In 1999, a three year long effort proved futile. In 2002, BA and American balked at US regulator demands to hand-over 224 weekly take off and landing slots to new competitors.
In spite of vociferous protests from Virgin Atlantic, which emblazoned its aircraft with “No Way BA/AA”, BA and American finally secured regulatory approval with relatively modest concessions.
The approval was granted for a period of ten years. As the UK should, short of some sort of political earthquake over the next few months, leave the European Union on 29 March 2019 and the existing approvals are due to expire 2020, the Competition and Markets Authority should have some jurisdiction given American and BA’s presence at Heathrow.
When reviewing the competitive impact of joint-ventures, regulators have historically focused on city pairs, rather than the overall number of slots held at an airport. With this in mind, American and BA were required to make available, subject to certain conditions, slots to new entrants on overlapping routes. From London, these were Boston, Chicago, Miami and New York JFK.
This process of overseen by an independent trustee Mazars which recently advertised three slot pairs for London – New York. It is not known if anyone has taken these up.
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