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EU probes oneworld, Star airline alliances  Apr 20, 2009

The Star Alliance and oneworld frequent-flier alliances are at the center of a competition probe, according to various media reports out today. The Wall Street Journal writes "the European Commission said Monday it has launched two antitrust cases looking into airline cooperation on transatlantic routes which could constitute an illegal cartel." Bloomberg News says the probe is on concerns about whether "carriers within each group are illegally cooperating on trans-Atlantic routes and prices."

Reuters writes "the probe relates to two sets of agreements between Star Alliance members Air Canada, Continental, Lufthansa and United on the one hand, and between oneworld members American Airlines, British Airways and Iberia on the other. The regulatory watchdog of the 27-nation European Union said the agreements provided for the coordination of the airlines' commercial, marketing and operational activities principally on routes between the EU and North America."

But "the level of cooperation in question appears far more extensive than the general cooperation between these airlines and other airlines which are part of the Star and oneworld alliances,"the Brussels-based European Commission says in a statement quoted by Bloomberg. The Journal writes "the commission said it is concerned the airlines' plans to jointly manage schedules, capacity, pricing and revenue on transatlantic routes may lead to reduced competition on the routes."

Bloomberg writes “companies can be fined as much as 10% of annual revenue and can be forced to make concessions if the commission finds that they’ve broken antitrust rules.”

The Associated Press writes that "if any of the airlines are found guilty, the Commission can force the company into changes and impose fines of up to 10% of global turnover. ... The investigations only centers on the member airlines that fly trans-Atlantic routes and do not affect the other members of the alliances."

Still, officials at most airlines affected by the investigation downplayed the probe. A British Airways official tells AP the probe "is a normal part of the EU process of examining our anti-trust immunity application with American Airlines and Iberia." The European Commission, however, had a different take. Spokesman Jonathan Todd tells Bloomberg: "It would be misleading to term this opening of the investigation as being routine."

EU probes oneworld, Star airline alliances
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