Five airlines have offered commitments to resolve the CMA's
competition concerns over their agreement to cooperate on
passenger routes between the UK and US.
- Five well-known airlines – British Airways, Iberia, Aer
Lingus, American Airlines, and Finnair – together form the
Atlantic Joint Business Agreement, where members agree on key
business decisions including prices and schedules
- As part of a CMA investigation, these airlines have offered
commitments to give competitors slots for take-off and landing at
London airports on 3 key routes: London-Boston, London-Miami, and
London-Chicago; and to carrying a minimum number of passengers on
London-Dallas
- The CMA is consulting on the airlines' commitments, and
interested parties can provide feedback ahead of the CMA reaching
a decision on whether to accept them
The Competition and Markets Authority (CMA) is investigating the
Atlantic Joint Business Agreement (AJBA), a group of 5 airlines
that cooperate, rather than compete, on transatlantic flights.
The companies involved – British Airways, Iberia, Aer Lingus,
American Airlines, and Finnair – contribute aircraft and flight
slots, coordinate routes and selling and distribution, and share
revenue, under the agreement.
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, due to the impact of
the COVID-19 pandemic, the CMA instead imposed Interim Measures
(effectively extending the key terms of commitments which had
been accepted by the Commission for 5 years). 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.
Commitments under consultation
The commitments would require American Airlines and British
Airways – the only 2 of these airlines to fly directly on these
routes – to offer slots to competitors on 3 key UK-US routes:
London-Boston, London-Miami, and London-Chicago. Rival airlines
would then be able to apply for these slots, available at
London's Heathrow and Gatwick airports, allowing them to offer or
increase flights on these routes – ensuring UK-US travelers can
get the best deals when choosing which airline to fly with.
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.
Slots at these two London airports are difficult to obtain. The
airlines that have the rights to them are able to keep them
provided they meet the minimum use criteria every year. This
means these sought-after slots rarely become available – however,
the commitments will continue to allow rival airlines to compete
on the specific UK-US routes by reducing this key barrier to
entry.
A further aspect of the commitments package is a requirement that
British Airways and American Airlines 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 3 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.
As is standard practice, the CMA is consulting on the commitments
offered by the airlines. Interested parties now have the
opportunity to provide feedback on the proposed commitments,
which will be considered by the CMA before it makes a decision on
whether to accept the commitments in their current form.
More information about the CMA's investigation can be found on
the dedicated web page: Investigation of the
Atlantic Joint Business Agreement.
Notes to editors
- British Airways, Iberia and Aer Lingus are owned by
International Consolidated Airlines Group SA.
- The CMA is today publishing its Notice of Intention to Accept
Commitments. Comments from interested parties are invited until
23 April 2025.
- Formal acceptance of the commitments would result in the CMA
terminating its investigation and not proceeding to a decision on
whether the Competition Act 1998 has been infringed. Accordingly,
a decision by the CMA accepting binding commitments would not
include any statement as to whether or not the conduct of any of
the parties has infringed the Competition Act 1998 prior to the
acceptance of the commitments or once the commitments are in
place.
- The CMA has engaged with the US Department of Transportation
throughout the investigation to date.
- Further details of the CMA's procedures in
Competition Act 1998 cases can be found here.
