The EU validates the agreement between British Airways, American and Iberia
July 15, 2010 – 12:05 amThe Oneworld alliance members British Airways, American Airlines and Iberia have obtained the green light Wednesday from the EU to deepen their partnership, after agreeing to divest a number of slots on transatlantic routes.
The European Commission has also approved unconditionally the merger between British Airways and Spanish Iberia.
The member airlines of the alliance Onewolrd want to deepen their partnership to take advantage of the open skies agreement "(open skies) between the U.S. and the European Union to liberalize air traffic between the two areas.
The EU executive said that the concessions made by the carriers, which are legally binding, were sufficient to raise concerns about possible harm to competition.It puts an end to the investigation he had initiated in April last year.
"Today's decision will allow airlines to set up the transatlantic alliance to which they aspired for a long while allowing some 2.5 million passengers (…) continue to benefit from a range of frequencies and competitive prices ", said Competition Commissioner Joaquin Almunia said in a statement.
By late afternoon, the action British Airways Iberia yielded 0.1% while gaining 0.2%, outperforming the Stoxx 600 index of transportation and recreation in the same time yielding 0.2%.
ACTION "shameful", BY VIRGIN
British Airways has welcomed the decision of the European Commission, stating that the U.S. authorities should also make their final decision soon.The UK carrier said the airline had launched their joint venture in the fall.
The action of the parent company of American Airlines, AMR, progressed by 1.0% at the NYSE.
"We expect the final decision of the U.S. Department of Transportation on our proposal will result in increased competition on the transatlantic market and thus bring significant benefits to the public," said AMR CEO Gerard Arpey.
The three companies have agreed to make slots for takeoff and landing flights between London and Dallas, Boston, Miami and New York.
Other commitments relate carriers access to their loyalty program on these routes and the provision of regular information to the European Commission on their cooperation.
Virgin Atlantic has called "disgraceful" the decision of the EU executive, adding that the proposals made by the companies did not resolve the competition problems caused by their alliance.
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