THE EUROPEAN Commission (EC), has launched an investigation, into six alliances between US and European airlines, to determine whether they will limit competition.
According to EC competition commissioner Karel Van Miert and transport commissioner Neil Kinnock, the aim is to give the EC similar powers to those of the US Justice Department, which has the authority to rule on deals involving alliances with non-US airlines.
The move comes after the proposed alliance between British Airways and American Airlines, but five other major tie-ups will also be studied - those of Lufthansa/United Airlines; Scandinavian Airlines System/United; British Airways/USAir; Swissair/Sabena/Delta and KLM/Northwest.
There is uncertainty over the action, which the EC could take if it found any of the deals to be anti-competitive. While it has well- established rights to rule on anti-competitive alliances between airlines belonging to European Union member states, the EC has no such mandate covering agreements forged with outside carriers.
Kinnock has been given permission to open preliminary talks on an air agreement with the USA, but a full external-relations policy has yet to be drawn up. David Balfour, of European law firm Frere Chumley Bixchoff, says that it would not be "easy" to apply current intra-European competition rules to non-EC carriers. He says that one option could be to operate a little-used provision within the Treaty of Rome giving the EC the power to ensure the application of competition rules "in co-operation with the authorities of member states".
Another area over which the EC might have power is in slot allocation. Airlines could be obliged to give up slots at their home airports, limiting the potential for expansion on contested routes.
Source: Flight International
