UK CMA opens up investigation into Atlantic Joint Business Agreement

11 / 10 / 2018

The UK’s Competition and Markets Authority (CMA) has opened an investigation into the Atlantic Joint Business Agreement (AJBA).

Four airlines are currently signed up to the AJBA: American Airlines, British Airways (part of International Airlines Group, or IAG), Iberia (also part of IAG) and Finnair.

The case is at an early stage and no assumption should be made that the agreement infringes competition law, the CMA stressed.

Following an investigation under European Union competition law in 2010, the European Commission accepted commitments from the parties in relation to six routes that would address potential competition concerns: London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami.

These included a commitment to make landing and take-off slots available to competitors at either London Heathrow Airport or London Gatwick Airport. These commitments were binding for 10 years.

On expiry of the parties’ commitments, due in 2020, the European Commission may re-assess the agreement, but there is no requirement for it to do so, the CMA noted.

As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the CMA said that it had decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments.

The CMA expects its initial investigation - involving information gathering, including issuance of information requests, CMA analysis and the review of information – to take continue until March next year.

The CMA added that it is liaising with the European Commission and the US Department of Transportation in relation to the investigation.

IAG, parent company of British carrier BA (as well as of Iberia), said in a statement: “International Airlines Group (IAG) notes the UK Competition and Markets Authority's announcement today and will respond to its review.

“Since 2010, British Airways and Iberia's transatlantic joint business with American Airlines and Finnair has been bringing significant benefits to millions of travellers. It provides them with improved access to cheaper fares and easier journeys to more destinations.

“During this period the joint business has launched 45 new routes including 14 between the UK and US. Also, the airlines are able to align their flight schedules and frequencies to enhance customers' travel choices.”