BA and American push for decision on tie-up
Tuesday 09 June 2009
British Airways and American Airlines have asked Europe's Competition Commission to formalise any objections to their proposed tie-up by the end of July, and remain confident the scheme will go ahead by the end of the year.
The monopoly watchdog began an investigation into the plans in April, denying BA's claims that the move was simply a procedural necessity.
The plans to co-ordinate transatlantic fares and capacity, and share revenues, between Oneworld alliance members BA, American and Iberia is being considered for anti-trust immunity (ATI) under US law. Competing airline groups Star Alliance – which includes Lufthansa and United Airlines – and SkyTeam – which includes Air France KLM, Delta and Northwest - already have ATI.
But in Europe there is no mechanism to sidestep competition rules. Alliances must prove that benefits to customers outweigh any infringement of rules on commercial collusion, and the investigation into the BA/American proposal comes alongside a similar inquiry into Star Alliance.
Despite potential objections from the European Commission, both American and BA claim to be confident of success. Willie Walsh, the BA chief executive, said: "We have advised the Commission that we would like them to move forward and present a statement of objections as soon as possible and that we will respond quickly. We remain as confident today of our ability to succeed in the application. This is an important issue for the consumer – it is about levelling the competitive playing field."
The latest ATI application is the third time that BA and American have tried to get together. Although the deal has outspoken critics, most notably Virgin Atlantic's Sir Richard Branson, BA and American say the situation is different because the US Open Skies treaty, passed last year, has opened up the market for Heathrow take-off and landing slots.
American Airlines's chief executive, Gerard Arpey, said: "If the facts matter, and they should, then we are very optimistic we will receive approval. This is good for the consumer and good for us because it means we can compete for the first time on a level playing field."
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