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UK authority to re-examine Oneworld transatlantic pact

British Airways and Iberia parent IAG is preparing a response to the UK competition regulator after it opened a probe into the transatlantic joint business agreement in which four carriers participate.

The business agreement – which was previously examined by the European Commission nearly a decade ago – includes BA and Iberia and their Oneworld alliance partners American Airlines and Finnair.

When the European Commission cleared the pact, it had accepted undertakings from the airlines to open competition on six transatlantic routes – of which five were focused on London.

The airlines had committed to making slots available to other operators at London Heathrow or Gatwick, for a 10-year period.

Since this period is due to expire in 2020 – and given the London-centric nature of the commitments – the UK Competition and Markets Authority says it is to “review afresh” the competitive impact of the joint business agreement.

“No assumption should be made that the [agreement] infringes competition law,” the authority stresses.

While the European Commission could re-examine the agreement, it is not obliged to do so.

The Competition and Markets Authority also points out that, because the UK is preparing to leave the European Union, the Commission may no longer have responsibility over competition regulation in the country.

It expects the initial investigation and analysis will be completed by around March 2019. The authority is consulting with both the European Commission and the US Department of Transportation as part of the probe.

Routes covered by the joint business agreement commitments comprise operations to London from Dallas, Boston, Miami, Chicago and New York, as well as the Madrid-Miami route.

IAG says it will “respond” to the authority’s review, without elaborating. It states that the joint business agreement has brought “significant benefits” to “millions” of passengers, through access to lower fares, schedule alignment, and a broader network of destinations – including 14 new routes between the UK and USA.

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