EU likely to approve BA / AA alliance after slot deal
11.03.10
The European Commission said yesterday that British Airways, American Airlines and Iberia, all members of the Oneworld alliance, have offered to cede slots at Heathrow, Gatwick and New York's John F Kennedy Airports. That concession is aimed at lowering barriers to entry for other airlines to fly from London to New York, Boston, Dallas and Miami - routes where British Airways and American Airlines currently dominate - in order to secure agreement for a deeper alliance on transatlantic routes.
The US Transportation Department gave preliminary approval to the arrangement last month on the condition that BA and AA cede four pairs of takeoff and landing slots at Heathrow. The European settlement would force the airlines to yield more slots at Heathrow - six rather than four.
On the London - New York city pair, the airlines have offered to provide the competitor with operating authorisations at JFK. They will also undertake to provide access to their frequent flyer programs on the relevant routes, allowing passengers of the qualified new entrants to accrue and redeem miles.
The commission said it would be seeking comment from interested parties on the settlement until April 10, normally a sign that the regulator itself considers the offer satisfactory. AP quotes bitter rival Virgin Atlantic saying that the airlines' offer is ‘woefully inadequate in counteracting the anti competitive harm of a combined BA/AA.’ BA responded recently that Virgin is not even using all of the slots it already owns at Heathrow, leasing some to rivals rather than operating flights with them itself.
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