July 14, 2010 / 10:00 AM / 10 years ago

BA and Iberia merger cleared by EU regulators

BRUSSELS (Reuters) - British Airways BAY.L, American Airlines AMR.N and Iberia IBLA.MC won EU antitrust clearance on Wednesday to deepen their Oneworld alliance on trans-Atlantic routes and better compete with rival groups.

A British Airways aircraft stands in front of a hangar at Heathrow Airport, west of London May 24, 2010. REUTERS/Stefan Wermuth

The European Commission, the EU competition watchdog, also cleared a British Airways’ merger with Iberia.

The Oneworld members want to broaden their pact to take advantage of the “Open Skies” agreement between the United States and the European Union, which liberalises trans-Atlantic aviation.

The carriers offered in March to give up a number of lucrative trans-Atlantic slots in a bid to ease competitive concerns by the European Commission.

The European Commission said the concessions were sufficient to ease competition concerns and that it was dropping its investigation launched in April last year.

“Today’s decision will enable the airlines to put in place the trans-atlantic alliance they have long aspired to while ensuring that the around 2.5 million passengers ... continue to benefit from a choice of frequencies and competitive prices,” Competition Commissioner Joaquin Almunia said in a statement.

Two sources with direct knowledge of the matter told Reuters on July 9 that the Commission would clear the deal.

The three carriers agreed to cede some landing and take-off slots for routes from London to Dallas, London to Boston, London to Miami and London to New York.

Other concessions include allowing access to their frequent-flyer programmes on those routes and submitting data on their cooperation plan to the Commission. The commitments are for 10 years.

Virgin Atlantic VA.UL has criticised the strengthened alliance, saying the proposals are woefully inadequate.

The Commission said the combined British Airways and Iberia would not significantly impede competition in the European Economic Area.

The U.S. Department of Transport in February tentatively allowed the three airlines antitrust immunity on trans-atlantic routes. A final decision will come after a period of consultation.

Star Alliance, which includes Lufthansa (LHAG.DE) and United Airlines UAUA.O, and SkyTeam, with members Air France (AIRF.PA) and Delta (DAL.N), have already been granted U.S. antitrust immunity.

The EU executive is now probing some members of these proposed alliances.

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