European Commission Launches Antitrust Probe into Airline Alliances

The European Commission has opened an antitrust investigation targeting several airlines from Star Alliance and oneworld, citing potential restrictions on competition on transatlantic routes. The probe focuses on alleged extensive cooperation between the airlines, including pricing, capacity, and scheduling, as well as revenue sharing. The Commission's goal is to determine whether these practices violate antitrust rules and harm consumers. If found guilty, the airlines could face fines of up to 10% of their turnover.

Key Takeaways:

• The European Commission has launched an antitrust investigation into Air Canada, Continental Airlines, Lufthansa, and United Airlines from Star Alliance, and American Airlines, British Airways, and Iberia from oneworld.
• The probe targets specific cooperative practices, including pricing, capacity, and scheduling, as well as revenue sharing.
• The Commission will investigate whether these practices restrict competition on transatlantic routes and potentially harm consumers.
• The investigation was not initiated on the basis of a complaint by a competitor airline.
• The Commission has emphasized that they have no problem with airline alliances per se, but the cooperation must result in benefits for consumers.

Statistics:

• 5 airlines from Star Alliance (Air Canada, Continental Airlines, Lufthansa, United Airlines, and American Airlines) and 3 airlines from oneworld (British Airways, Iberia) are targeted in the probe.
• The Commission may impose fines of up to 10% of the turnover of the airlines engaged in unlawful practices.
• The investigation will determine whether the negative effects of potential antitrust infringement have been offset by positive effects for consumers.

Sources:

• European Commission press release, 20 April, no date
• Spokesman for Competition Commissioner Neelie Kroes, statement, 20 April, no date