Oneworld carriers secure final clearance for transatlantic tie-up

Washington DC
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The US Department of Transportation (DOT) today approved the application of oneworld members American Airlines, British Airways, Iberia Airlines, Finnair, and Royal Jordanian Airlines for anti-trust immunity on transatlantic routes.

The ruling finalizes a tentative decision made by the DOT in February and follows European Commission approval, which was secured last week.

"We have concluded that the joint venture, as well as the overall alliance, is, on balance, pro-competitive and that it is likely to generate substantial public benefits to the traveling and shipping public," the DOT says in its final order.

The regulatory agency says the deal will provide benefits to consumers, including lower fares on some routes, potential new nonstop routes, and enhanced schedules. In addition, the DOT also believes anti-trust immunity for the alliance will "enhance competition around the world by enabling the oneworld alliance to compete more vigorously with Star Alliance and SkyTeam".

Due to some competitive concerns, however, the DOT will require the carriers to give up four Heathrow slots that will enable competitors to launch new routes. Two of these slot pairs are slated for Boston service, while the latter two are available for any other US service.

The DOT says that its slot remedy is "essentially the same" as the one proposed by the European Commission, "except for the initial two-year period in which the use of the latter two pairs of slots is limited to Heathrow-Dallas/Ft. Worth and Miami nonstop services".

In a statement applauding the DOT ruling, American, BA and Iberia said they are now preparing to launch the transatlantic joint business this autumn. The cooperation will cover flights between the EU, Switzerland and Norway and the USA, Canada and Mexico.

"This final approval is fantastic news for all three airlines and the oneworld alliance," British Airways CEO Willie Walsh said in the statement. "We've waited 14 years to bring the benefits of the transatlantic joint business to our customers and level the playing field with the other two global alliances. As we have argued all along, the EU-US market is highly competitive and Heathrow's liberalization in 2008 opened it up even further. We are delighted that the US and EU authorities have recognized this.

"We're pleased that the DOT and EU have worked together to ensure that there is consistency in the number of slots that the three airlines have to give up for our competitors to use on services from Heathrow to the US."

American CEO Gerard Arpey adds: "We look forward to delivering enhanced competition for customers on transatlantic flights. By working collaboratively, we will enhance our product offerings, strengthen our route networks and better position our airlines to compete in an ever-changing global aviation marketplace."

American, BA and Iberia say their customers will be now be able to travel more easily across their networks, which includes 433 destinations in 105 countries with 5,178 daily departures.

"A new kind of collaboration between our three airlines will lead to better service levels for our customers. This means that our customers will have more destinations to choose from around the world, better scheduled travel times, better connections and more competitive fares," says Iberia executive chairman Antonio Vazquez. "I am convinced that consolidation is the best and only way to succeed in the airline industry, and the approval we have received today to create a joint business is a very important step towards this consolidation process."