Airlines may alter alliance for EU

February 02, 2010|Associated Press

BRUSSELS - British Airways, American Airlines, and Iberia have offered changes to plans to share more of their lucrative trans-Atlantic routes in an effort to settle an antitrust dispute with the European Union, EU regulators said yesterday.

The European Commission “is assessing the effectiveness of proposed commitments’’ put forward by the three airlines to soothe worries that expanding their alliance may violate rules that forbid companies striking deals that shut out rivals.

It said it would ask rival airlines to examine the proposed changes. It gave no details of what the airlines have offered.

If BA, American, and Iberia manage to settle with EU regulators, they would avoid fines that can go as high as 10 percent of global annual revenue.

The US Department of Justice said in December that the tie-up would cause competitive harm and raise prices unless the airlines surrendered some take-off and landing slots. A final decision has yet to be made by the US Department of Transportation.

The three airlines currently coordinate how they sell and operate flights between the 27-nation EU and the United States. They now want to expand the alliance to jointly manage schedules, capacity, and pricing on flights from Canada, Mexico, Puerto Rico, Norway, and Switzerland, as well.

BA, American, and Iberia said last year that the planned new alliance would reduce fares and give passengers more convenient connections and better access to some 500 destinations.

The EU has long been suspicious about how airline alliances affect prices for flying between Europe and the United States.