British Airways and American Airlines have offered to give up slots at Heathrow or Gatwick airports as they attempt to resolve concerns raised by the Competitions and Markets Authority over competition on US routes.
This year sees the expiry of a set of binding commitments signed in 2010 after a competition investigation into the Atlantic Joint Business Agreement which covers IAG carriers BA, Iberia and Aer Lingus in addition to AA and Finnair.
Under the terms of the AJBA, the airlines agreed not to compete on routes between the UK and US.
A statement from the CMA said: “Ahead of the expiry of the commitments, the CMA launched an investigation into the AJBA in October 2018, reflecting the fact that five of the six routes subject to commitments are from the UK and to prepare for the time when the European Commission would no longer have responsibility for competition in the UK.
“The CMA examined the impact on customers on UK-US routes from the loss of competition due to the AJBA. It assessed the competition from other airlines on each route and the benefits that the AJBA may deliver including improved schedules, connections and new routes.
“It identified potential competition concerns on routes between London and each of Boston, Chicago, Dallas, Miami and Philadelphia.”
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In response to the CMA’s concerns, BA and AA have offered measures including:
- Releasing additional take-off and landing slots at London Heathrow or Gatwick airports to enable competitors to begin or increase non-stop flights between London and Boston, Dallas and Miami.
- Measures to support competing services on these routes as well as on the London to Chicago and London to Philadelphia routes, including access to connecting passengers on preferential terms.
The CMA said it would now open a consultation on the proposed commitments, and will allow additional time for responses if required in light of the coronavirus crisis.
It added that the commitments made by the airlines allowed it to review the AJBA if competitive conditions are different in the future.
Ann Pope, senior director, antitrust, said: “We welcome the offer from BA and American Airlines to find a way of addressing the CMA’s concerns. Their suggested resolution has the potential to increase competition and deliver lower fares for customers, while also preserving the benefits that joint airline agreements offer passengers.
“We are acting now as the current commitments expire this year, but can review the agreement in the future if the market does not return to its pre-Covid state.”
The consultation is currently due to run until 5pm on June 4, but could be extended.