Wednesday, March 10, 2010

Commission on the Verge of Approving oneworld

According to a number of stories out today, the oneworld Alliance is on the verge of winning an antitrust exemption from the European Commission to cooperate closer on marketing, pricing, routes, and revenue sharing following the alliance's agreement to surrender slots at some of the world's busiest airports.  See, e.g., James Kanter, E.U. Signals Approval for Larger Alliance, N.Y. Times, Mar. 10, 2010 (available here); Terry Maxon, European Regulators Say American Airlines, Partners Have Offered to Give Up London Flights, Dallas Morning News, Mar. 10, 2010 (available here).   

The Commission, which opened an investigation into the alliance last year, recently issued a series of objections to the link-up.  In response, the alliance offered a series of concessions.  According to the Commission:

The commitments proposed by the parties are primarily aimed at enabling competing airlines to start operating on the affected routes by lowering barriers to entry. Concretely, they offer to make available landing and take-off slots at London Heathrow or London Gatwick airports on routes to Boston, New York, Dallas and Miami. On the London-New York city pair, the parties also propose to provide the competitor with operating authorisations at New York JFK airport.

In addition, British Airways, American Airlines and Iberia undertake to provide access to their frequent flyer programmes on the relevant routes, allowing passengers of the qualified new entrants to accrue and redeem miles on the parties' frequent flyer programmes.

The parties also propose to allow fare combinability and offer special prorate agreements in relation to the routes of concern, which would enable competitors to offer tickets on the parties' flights and facilitate access to connecting traffic.

See Press Release, European Commission, Antitrust: Commission Market Tests Commitments Proposed by BA, AA and Iberia Concerning Transatlantic Operation, IP/10/256 (Mar. 10, 2010) (available here).

With the oneworld Alliance receiving tentative antitrust immunity last month from the Department of Transportation, the European Commission's investigation remained the last regulatory hurdle for the joint venture to clear. 

The timing of the decision should not be ignored.  U.S. and EU negotiators are scheduled to meet later this month in Brussels to continue their second stage air transport negotiations.  A positive decision on oneworld from the Commission complements the DOT's approval which, as discussed previously on the blog, see "The Aeropolitics of the oneworld Order," was apparently timed to lead into the two sides' mid-February talks in Madrid.

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