EU launches anti-trust probe of airlines

The European Commission launched Monday a probe into pacts between some airlines in two major alliances on suspicion the deals might constitute restrictive business practices on transatlantic routes. One inquiry concerns existing and planned co-operation between four current or prospective members of the Star Alliance - Air Canada, Continental, Lufthansa and United, the EU's top competition regulator said in a statement.
The second involves proposed co-operation between three members of the Oneworld alliance - American Airlines, British Airways and Iberia of Spain. "We think that there may be breaches of the anti-trust rules because of the very extensive levels of co-operation on transatlantic routes between these airlines," said competition issues spokesman Jonathan Todd. "We are opening a formal anti-trust investigation. We would not do that unless we thought there was good reason to pursue this," he added.
Star Alliance was built in 1997 around German flag carrier Lufthansa, while Oneworld formed two years later, with British Airways at its centre. A third alliance, SkyTeam, was launched in 2000 around Air France. Brussels said it was investigating whether the agreements between the seven companies would mean too much co-operation between them, mainly on routes between the EU and North America.
"In particular, the parties to each agreement intend to jointly manage schedules, capacity, pricing and revenue management on transatlantic routes, as well as share revenues and sell tickets on these routes without preference between these carriers," the commission noted. "The commission is assessing whether these joint activities may lead to restrictions of competition on certain transatlantic routes."
The Star Alliance probe covers existing transatlantic co-operation between Lufthansa and United, and between Lufthansa and Air Canada, as well as a proposed four-party agreement between them and Continental. The commission said the probes, for which no deadlines for completion have been set, do not imply that it has conclusive proof about any infringement but it did mean that the cases would be given priority treatment.