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BBT March/April 2019 cover
March/April 2019

CMA investigating airlines’ transatlantic agreement

British Airways tail fins

The Competition and Markets Authority (CMA) has launched an investigation into the Atlantic Joint Business Agreement between American Airlines, British Airways, Iberia and Finnair.

The agreement, which was established in 2008, sees the airlines share revenue on all passenger routes between Europe and the US.

The European Commission reviewed the agreement between 2009 and 2010 and decided to allow the deal to continue until 2020 so long as the airlines made take-off and landing slots at Heathrow and Gatwick available to competitors. More specifically, the commission’s concerns related to routes from London to Dallas, Boston, Miami, Chicago and New York, as well as from Madrid to Miami.

The CMA says it will investigate whether the agreement is harming competition on transatlantic flights, using the rules of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union.

A statement on the CMA website says the European Commission has no obligation to re-investigate the deal, but that it decided to re-open the review early in preparation for Brexit, after which point the commission may not have authority over UK markets.

A statement on the CMA’s website says: “As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the CMA has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments.”

The CMA comments that its investigation does not necessarily mean the agreement is in breach of competition rules.

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