In­ves­ti­ga­tors look at air­lines’ transat­lantic pric­ing deal

The Daily Telegraph - Business - - Business - By Oliver Gill

COM­PE­TI­TION reg­u­la­tors have launched an in­ves­ti­ga­tion into a transat­lantic pric­ing deal be­tween Bri­tish Air­ways and three other air­lines.

The Com­pe­ti­tion and Mar­kets Au­thor­ity (CMA) is in­ves­ti­gat­ing a se­ries of com­mit­ments made by Bri­tish Air­ways, Amer­i­can Air­lines, Ibe­ria and Fin­nair to the EU, which also al­low the quar­tet to co­op­er­ate on ca­pac­ity and sched­ules.

The At­lantic Joint Busi­ness Agree­ment was struck in 2010 to ad­dress com­pe­ti­tion con­cerns raised by Brus­sels. It re­lates to six routes: Lon­don-Dal­las, Lon­don-Bos­ton, Lon­don-Mi­ami, Lon­don-Chicago, Lon­don-New York and Madrid-Mi­ami.

In­cluded in the con­ces­sions were pledges to make land­ing and take-off slots avail­able to com­peti­tors at either Heathrow or Gatwick. The CMA said in a state­ment: “This case is at an early stage and no as­sump­tion should be made that the At­lantic Joint Busi­ness Agree­ment in­fringes com­pe­ti­tion law.”

Bri­tish Air­ways and Ibe­ria’s owner IAG said the transat­lantic ac­cord had “en­hanced cus­tomers’ travel choices” and pro­vided “cheaper fares”.

Ex­perts high­lighted the CMA in­ves­ti­ga­tion as an ex­am­ple of how com­pe­ti­tion is­sues are likely to be han­dled after the UK leaves the EU. The un­der­tak­ings are due to ex­pire in 2020, by which time “the Euro­pean Com­mis­sion may no longer have re­spon­si­bil­ity for com­pe­ti­tion in the UK”, the CMA said.

Steven Vaz, a com­pe­ti­tion lawyer at Ashurst, said: “Post-Brexit, UK com­pe­ti­tion au­thor­i­ties are more likely to re­view in­ter­na­tional agree­ments af­fect­ing the UK, work­ing closely with the Com­mis­sion where ap­pro­pri­ate.”

Transat­lantic fly­ing has been a fierce bat­tle­ground for a num­ber of years. In 2012, Wil­lie Walsh, the IAG boss, bet Sir Richard Bran­son £1m that Vir­gin At­lantic would not ex­ist in five years’ time. Last year Sir Richard called on Mr Walsh to set­tle the “very pub­lic and painful” wa­ger.

The in­ves­ti­ga­tion comes as BA this week lost its crown to low-cost ri­val Nor­we­gian as the big­gest non-US op­er­a­tor on routes to and from New York. In re­sponse, BA said its com­mit­ment to New York “is as strong as ever”.

Wil­lie Walsh, the CEO of IAG, bet Sir Richard Bran­son £1m that Vir­gin At­lantic would not ex­ist in 2017

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