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The U.K.’s antitrust regulator will reassess an alliance that lets British Airways and American Airlines operate as a single business on North Atlantic routes as the body prepares to expand its role following Brexit.
The Competition and Markets Authority has begun an investigation into the 2008 agreement that features revenue sharing, price coordination and joint scheduling and also includes Finnair Oyj and BA’s Spanish sister company Iberia, the regulator said in a statement Thursday.
The probe will examine whether commitments expiring in 2020 that address competition concerns on routes from London to New York, Chicago, Boston, Miami and Dallas and from Madrid to Miami should be extended. The deal, brokered by the European Commission, includes the surrender of operating slots to rivals at London’s Heathrow and Gatwick hubs.
“As five of the six routes subject to commitments are from the U.K., and to prepare for the time when the European Commission may no longer have responsibility for competition in the U.K., the CMA has decided to review afresh the competitive impact of the agreement,” the regulator said.
While the CMA would take over the EU’s antitrust-oversight role for deals involving the U.K. after Brexit, the likelihood of a transition agreement on the split means it’s not yet clear when that might happen. The comments on the airline pact provide one of the earliest insights into the preparations underway.
British Airways and American took more than a decade to win approval for their alliance, which remains a key profit driver in the world’s busiest premium air-travel market.
©2018 Bloomberg L.P.