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American Airlines and British Airways agree to release slots on UK-US routes

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American Airlines and British Airways agree to release slots on UK-US routes
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Juliette Enser Executive Director of Competition Enforcement at the CMA | Official Website

American Airlines and British Airways have taken a step towards resolving competition concerns on transatlantic flights between London and the United States. In a recent development, the airlines have agreed to grant rival carriers access to coveted slots on several major UK-US routes. This move comes after the UK Competition and Markets Authority (CMA) completed an investigation into the Atlantic Joint Business Agreement (AJBA), an alliance between IAG’s British Airways, Aer Lingus, Iberia, American Airlines, and Finnair.

Juliette Enser, Executive Director of Competition Enforcement at the CMA, highlighted the potential benefits of airline alliances. She stated, "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." She further explained, "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."

To address CMA’s concerns, American Airlines and British Airways will make available slot pairs on three significant UK-US routes. These include slots at Heathrow (LHR) or Gatwick (LGW) for up to seven nonstop weekly flights to Boston Logan International Airport (BOS), Miami International Airport (MIA), and Chicago O’Hare International Airport (ORD).

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The availability of slots at LHR and LGW is limited, making this decision consequential for other airlines seeking to enter the market. Presently, the Delta and Virgin Atlantic joint venture and JetBlue Airways offer services on the London-Boston route, while Delta, Virgin Atlantic, and Norse Atlantic Airways compete on the London-Miami and London-Chicago routes without the use of interim measures.

This strategy aims to bolster competition, with the CMA stating: "The release of slots facilitating a nonstop competitor service on London – Boston would address the competition concerns it has identified in respect of that route. In particular, this will enable an additional nonstop competitor service to operate compared to a scenario where no remedy slots are available.” The CMA anticipates that the new commitments will prompt rival airlines to utilize year-round nonstop services.

On the London-Chicago route, the CMA noted: “The ABJ [American Airlines and British Airways – ed. note] has maintained a strong position in the Premium and Non-premium markets, though its market power has been constrained by United. In this context, the CMA provisionally considers that the slot remedies proposed, which are intended to facilitate new entry, will ensure that there is a sufficient competitive constraint to the AJB on the London – Chicago route.”

The CMA is currently consulting on the commitments offered by the airlines, marking a significant step in addressing competition issues on the transatlantic routes.

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