US Justice Department wants BA / AA to give up Heathrow slots
21.12.09
British Airway's planned alliance with American Airlines should be given antitrust immunity only if some Heathrow takeoff and landing slots are surrendered or routes are exempted from the partnership, the US Justice Department (DoJ) has said. Without the changes, the proposal ‘would result in competitive harm on certain transatlantic routes serving 2.5 million passengers annually,’ the Justice Department said in a filing yesterday.
American, the second-largest U.S. carrier, and BA, Europe’s third-biggest, would be able to jointly price, market and schedule international flights in their Oneworld alliance without fear of antitrust prosecution, if their request for immunity is granted. The Transportation Department, which will decide the request, should grant immunity with conditions, the DoJ said.
Fares between six city pairs, including New York-London, Boston-London and Chicago-London, would increase as much as 15 percent under the proposed plan, the DoJ said in the filing. The Transportation Department ‘could require applicants to divest slots’ to encourage new competition, it said, without specifying how many slots could be yielded. Exempting routes from the immunised alliance ‘preserve incentives of the current market participants to compete,’ it said, without detailing which routes it believes should be excluded.
American said in a statement that it ‘disagrees with the conclusions reached by the US Department of Justice. American looks forward to rebutting the points made by DoJ and expects that the US Department of Transportation will approve our alliance in a timely manner.’
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