Trans-Atlantic agreement expected to breach competition rules: British Airways and Iberia decline
Shares in British Airways lost 2.2% yesterday, as expectations grow that the European Commission (EC) would find a breach to European competition rules posed by BA’s trans-Atlantic cooperative business agreement with Iberia and American Airlines.
The oneworld alliance carriers have applied for anti-trust immunity in Europe and the US to allow them to coordinate fares and schedules. The EC is reportedly likely to find the agreement would result in “appreciable competitive harm” on seven routes between the EU and the US, namely from London to New York, Dallas, Boston, Miami and Chicago, and Madrid to Miami and Chicago.
Remedies could include the transfer of take-off and landing slots to other carriers. British Airways commented that it would “address and overcome” any objections raised by the EC and does not believe it will be necessary to transfer or give up airport slots at London Heathrow. The carrier believes that the regulatory and competitive environment has changed significantly since it last applied for anti-trust immunity with American Airlines in 2001. The US Department of Transportation is due to announce its preliminary decision on the anti-trust application by 31-Oct-2009.
Europe selected airlines daily share price movements (% change): 26-Oct-09