- 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.
- For media enquiries, please contact the CMA press office on 0203 738 6460 or [email protected]
