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AA-BA Alliance

Regulators ask for more information on American Airlines-British Airways alliance  Dec 23, 2008

Government regulators want to know more about how a proposed alliance between American Airlines and British Airways could affect competition on overseas flights.

The U.S. Transportation Department asked the airlines to provide more information about the planned partnership, including its impact on Heathrow Airport in London, cargo operations, and service in Asian and Latin American markets.

Regulators also asked how a merger between British Airways and Australian carrier Qantas could affect the alliance. Although those two airlines broke off merger talks earlier this month, officials with the Transportation Department noted that they could resume discussions in the future.

The airlines have requested that the alliance be exempted from antitrust laws, which would allow them to coordinate operations, schedules, marketing and other business decisions on trans-Atlantic flights. In addition to American and British Airways, the alliance would include Spanish carrier Iberia, Finnair and Royal Jordanian Airlines.

The request for additional information comes after several competing carriers, including Virgin Atlantic and Air France, lodged protests against the alliance, criticizing it as unfair and anti-competitive.

Officials at Fort Worth-based American called the request for more information "standard procedure" and said it shouldn’t delay the decision on the alliance.

"We look forward to responding to the request as quickly as possible so that DOT can deem our application complete and then make a decision within the required six months," said Andy Backover, a spokesman. "We remain confident that the facts strongly support approval of our application and continue to believe we will receive approval well before the end of 2009."

Several other airlines, in- cluding United Airlines, Del- ta Air Lines, Air France and KLM, already have antitrust exemptions for international alliances.

American and British Airways have sought the same status for years. Regulators rebuffed past requests because the two airlines dominate Heathrow, the busiest hub in Europe. But American executives note that a new aviation treaty has opened Heathrow up to more competition in recent years.

The proposed partnership has also been criticized by American’s unions. Labor leaders worry that the alliance could mean a reduction in jobs at the airline.

Regulators ask for more information on American Airlines-British Airways alliance
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