January 27, 2012
EC Opens Antitrust Investigation of Air France-KLM, Alitalia, Delta
The European Commission has opened an antitrust investigation focused specifically on agreements between Air France-KLM, Alitalia and Delta on transatlantic routes, and has closed a broader investigation that had included fellow SkyTeam members Korean Air, Czech Airlines, Aeromexico and Continental. See European Commission Press Release, Jan. 27, 2012 (available here). The agreements in question were signed in 2009 and 2010 allowing the three carriers to coordinate on capacity, scheduling, pricing and revenue management and to engage in profit and loss sharing on EU-U.S. routes. The investigation is consistent with the EC's ongoing investigation of similar agreements between Star Alliance members Lufthansa and United and the EC's completed investigation into British Airways and American Airlines from the oneworld alliance which resulted in approval once the carriers agreed to certain airport slot concessions. See Aoife White, Air France-KLM, Delta, Alitalia Probed by EU Over Alliance, Bloomberg News, Jan. 27, 2012 (available here).
January 26, 2012
Members of U.K. Parliament Express Willingness to Ground Planes Over ETS
The British parliament's Energy and Climate Change Select Committee has recommended that any foreign carriers that refuse to participate in the EU's emissions trading scheme should be grounded. See Mathew Carr, U.K. Lawmakers Threaten to Ground Non-Carbon Compliant Planes, Bloomberg, Jan. 26, 2012 (available here). The Committee's comments appear directed at U.S. carriers as the U.K. is the Member State designated for enforcement and allowance collection for U.S. airlines. This latest rhetoric provides yet another example of the intensity of opinion on both sides of this dispute, and offers some pushback by ETS defenders against recent criticism from the U.S., China, India and Russia. At this point it remains only rhetoric however, as U.S. carriers claim to be complying with the ETS and it is far from clear that the Committee's enthusiasm for a trade war on this issue is shared by the rest of the U.K. government or EU authorities who are presently facing a myriad of other economic concerns. Don't expect actual grounding of U.S. aircraft any time soon.
January 25, 2012
Japan and U.K. Making Progress on Liberalizing Air Services Agreement
Recent talks between Japan and the U.K. on a bilateral aviation pact have produced an agreement to employ an open skies policy regarding flights to and from Narita International Airport. See Narita Part of U.K. Open-Skies Deal, Japan Times, Jan. 25, 2012 (available here). This reflects a continuation of recent trends by both countries. Japan signed open skies agreements with the U.S. in 2010 as well as Canada and Australia in October of 2011. The U.K. has made a concerted effort to expand its access to Asian markets, most notably through its wide-ranging 2007 open skies agreement with Singapore.
January 24, 2012
Yet Another Temporary FAA Funding Extension
With FAA funding set to expire January 31, the House of Representatives approved a short-term extension that will keep FAA programs funded through February 17 to allow enough time to finalize a long-term funding bill. See House Approves Short-term Extension of FAA Programs for the 23rd Time, Long-term Plan Near, Associated Press, Jan. 24, 2012 (available here). This will be the 23rd short-term funding extension since 2007, a disgraceful state of affairs that impedes long-range planning. However, news broke last Friday of a compromise that reportedly will allow passage of a long-term funding bill in the coming weeks.
New U.S. Passenger Protections Take Effect
The remaining aviation rule changes issued by the U.S. Department of Transportation last April become effective today and Thursday. See Susan Todd, Airline Passengers to Get a Break on Baggage Costs and Other Fees, Star-Ledger, Jan. 24, 2012 (available here). The rules regarding tarmac delays and lost baggage compensation took effect last August. Today's rules require airlines to disclose baggage fees at the time of ticket purchase, provide prompt notification to passengers regarding delayed or canceled flights, and allow passengers to reserve a ticket for 24 hours or cancel a purchase within 24 hours without penalty if more than a week before the scheduled flight. The final rule change will take effect Thursday and will require airlines advertisements to include the actual price of the ticket including taxes, fuel surcharges and other fees. The text of the regulations are available here.
January 23, 2012
Do UK Competition Authorities Need to Scrutinize IAG Purchase of BMI?
Last month International Airline Group (IAG), the parent company of British Airways and Spanish carrier Iberia reached an agreement with Lufthansa to acquire British Midland International (BMI). While the merger has to be approved by European Commission (EC) competition authorities, Virgin Atlantic, which made an unsuccessful bid for BMI, is pushing for British regulators to examine the effects of the deal on the UK domestic market as well. See Rob Gill, Virgin Atlantic Pleads for UK Authorities to Probe BA-BMI Deal, Air & Business Travel News, Jan. 16, 2012 (available here). The primary concern is that, if approved, the merger would increase IAG's control of slots at Heathrow airport from 44% to 53%. IAG has said it intends to use the new slots for long-haul routes, which would imply the merger is more likely to affect international rather than domestic markets, making EC regulators a greater obstacle than any potential review by UK regulators.