EU sends complaints against American, BA, Iberia deal

The European Union sent antitrust complaints to AMR Corp’s American Airlines, British Airways Plc and Spain’s Iberia Lineas Aereas de Espana SA challenging the carriers’ proposed trans-Atlantic alliance.

The airlines received so-called statements of objections against their planned agreement on coordinating operations and marketing on trans-Atlantic routes, the European Commission, the EU’s antitrust authority, said in an e-mail today.

The Brussels-based commission said the deal may be a “breach of European rules on restrictive business practices.”

Carriers are vying to bolster partnerships on sales and scheduling to cut costs amid a slump in demand for air travel caused by the global recession. Airlines worldwide may lose a combined $11 billion this year, the International Air Transport Association estimated Sept 15.

American, British Airways and Iberia are seeking clearance to cooperate on flights between the US, Mexico and Canada, the 27-nation EU, Switzerland and Norway. The carriers asked for antitrust immunity last year.

British Airways fell as much as 5.8 pence, or 2.7 per cent, to 212 pence and was down 2.1 per cent at 12:42 p.m. in London. The stock has gained 19 per cent this year, valuing the carrier at £2.5 billion ($4 billion).

British Airways and American say they need a tie-up for their Oneworld partnership to compete against the Star Alliance and SkyTeam groups on routes across the Atlantic. The carriers also need antitrust clearance from US regulators before proceeding with the alliance.

“The odds are in favor of a successful application if other alliances have been granted it,” said Douglas McNeill, an analyst at Astaire Securities in London. “That’s not to say there won’t be conditions attached, as in the past the regulators have asked for slots to be given up.”