BA and AA offer US-UK slots to allay competition concerns

British Airways and American Airlines have offered to give up airport slots on three key UK-US routes to allay Competition and Markets Authority (CMA) concerns about transatlantic services.

The move is a result of a long-running CMA investigation into the Atlantic Joint Business Agreement (AJBA), which comprises BA, AA, Iberia, Aer Lingus and Finnair.

The member airlines cooperate, rather than compete, on transatlantic flights, and agree on key business decisions including prices and schedules.

Now BA and AA have offered commitments to give competitors slots for take-off and landing at London airports on three key routes: London-Boston, London-Miami and London-Chicago; and to carrying a minimum number of passengers on London-Dallas services.

Rival airlines would then be able to apply for these sought-after slots, available at Heathrow and Gatwick, allowing them to offer or increase flights on these routes.

The CMA said this would ensure UK-US travellers can “get the best deals when choosing which airline to fly with”.

More: Watchdog imposes measures to protect competition on transatlantic air routes [Sept 2020]

BA and AA offer slots to allay CMA concerns over US routes [May 2020]

It said remedy slots allowing competitor airlines to operate on US-UK routes have been a core part of the commitments which have been in place since 2010.

The commitments package also requires BA and AA to carry a minimum number of ‘local passengers’ (those who do not start or end their journeys elsewhere) on the London-Dallas route each year.

This would protect against a reduction in services on the route and help to constrain prices.

The commitments also include measures to support competing airlines on the three key routes, including giving access to connecting passengers on preferential terms.

Juliette Enser, executive director of competition enforcement at the CMA, said: “Airline alliances can deliver broader economic benefits, such as enhanced connectivity and new services.

“But the CMA has concerns about the AJBA’s impact on key UK-US routes.

“Accepting these commitments could address those concerns and protect passengers on the routes, including by making it easier for other airlines to compete, and bring our investigation to a close while allowing the AJBA to continue to operate.”

The CMA is now consulting on the airlines’ commitments, and interested parties can provide feedback ahead of the authority’s decision on whether to accept them. Comments are invited until April 23.

The European Commission reviewed the AJBA in 2010, accepting commitments, including the availability of slots on some UK-US routes, which were effective for 10 years.

The CMA commenced investigating the AJBA in 2018 in preparation for the end of those commitments and considered a potential commitments package in early 2020.

However, because of the pandemic, the CMA instead imposed interim measures, effectively extending the key terms of commitments for five years.

The CMA said: “As the sector is now sufficiently recovered from the pandemic, the CMA has completed its review of the AJBA and has considered a new package of commitments offered by the parties which it provisionally considers will address its competition concerns.”