The experience with a decade of North Atlantic airline joint ventures

ONE OF THE MANY unanticipated consequences of the uncertainties raised by Brexit has been the increased regulatory scrutiny of North Atlantic airline joint ventures. Members of these JVs are allowed to coordinate schedules and prices only, with regulatory immunity from competition rules.

In Oct-2018 the UK's Competition and Markets Authority (CMA) launched an investigation into the JV inside oneworld between British Airways, Iberia, Finnair and American Airlines. The JV was approved by the European Commission in 2010 after JV members gave commitments to release slots to competitors on six city pairs: London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami.

The commitments expire in 2020, after the UK's scheduled exit from the EU, and five of the routes touch the UK, hence the CMA's investigation ahead of their expiry. It is expected to report in the first half of 2019.

CAPA analysis indicates that there has been only a limited increase in competition, if any at all, on these routes and on the two routes most important to the other JVs (Paris-New York and Frankfurt-New York). Competition investigations are complex, and it would be foolhardy to second-guess their outcome. Importantly, the CMA's study could prompt other regulators to review the North Atlantic aviation market.