DAVID FIELD / WASHINGTON DC
British Airways' plan to expand its link-up with American Airlines into a full alliance is in the hands of the European Commission (EC) and UK authorities after it emerged that the most serious objection from the USA was surmountable.
Competition authorities at the US Department of Justice's (DoJ) antitrust division urged the US Department of Transportation (DoT) to impose slot divestitures and other conditions on the proposal, recommending BA and American be forced to give up enough London Heathrow slots for at least 126 transatlantic flights a week.
The conditions are considerably less severe than the 336 slots the US wanted divested when it opposed the original plan in 1998. Given this, American and BA "should be tickled pink", according to Global Aviation Associates managing director Jon Ash. This clears the way for a decision to be made by the UK's Office of Fair Trading and the EC, he says.
The DoJ has in effect set the parameters for bargaining between the two carriers and the DoT, which is due to make a ruling this month.
AA and BA said the DoJ filing was "not unexpected from an agency that has traditionally taken the hardest line" in airline competition, calling it "an outer limit of potential remedies", which suggests the DoJ is willing to bargain. The DoJ objection is by no means final: in the past the DoT has rejected its recommendations in some high-profile cases.
The DoJ also urged that the alliance not get pricing immunity on flights between London Heathrow and Chicago O'Hare and Dallas/Fort Worth because "even with slots other airlines would be unlikely to enter" these markets.
The slots to be given up would allow other carriers to operate seven daily roundtrips between Heathrow and New York and two between Heathrow and Boston.
The antitrust unit did not oppose a grant of antitrust immunity to United Airlines and bmi British Midland because bmi would not change the US/London competitive situation, it said.
The final decision on United and bmi will be made in the same DoT ruling that applies to American and BA.
Source: Flight International
