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The tie-up plan on transatlantic routes between British Airways and American Airlines has suffered yet another setback after the US Department of Justice deemed the joint venture could result in competitive harm. The competition watchdog believed that British Airways and AA should agree to concessions in order to secure approval, with officials recommending that BA sell some of its previous take-off and landing slots at London’s Heathrow airport.
Both airlines have made two unsuccessful attempts to form a joint venture on services across the Atlantic. On both occasions, British Airways has been told to give up some of its slots at Heathrow. Chief executive officer for British Airways Willie Walsh has rejected suggestions to hand over the slots this time. The carriers, along with BA merger partner Iberia, request that officials waive normal competition regulations to let them work together on routes between Europe and the US.
If the tie-up between the Oneworld alliance partners wins approval, it would mean they would be able to share costs and revenues, and set schedules on transatlantic flights. However US authorities have said the applications claim substantial benefits from flow from an expanded alliance, but they have not shown that immunity is necessary to achieve these benefits. The DoJ also claimed that airfares on flights from UK servicing US destinations could rise by about 15 per cent under the BA/AA tie-up, with six routes in particular, including Boston to London; Chicago to London; Dallas to London; Miami to London; Miami to Madrid; and New York to London.
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