Competition Policy Newsletter

British Airways, and American : cooperation and ANTITRUST consolidation under review by the Commission by Emmanuelle Mantlik, Daniel Mes, Tatyana Panova, Anatoly Subočs, Axel Specker and Lucia Bonova (1)

1. Introduction between airlines at international (2). The Com- mission’s investigation concerned only the close On 14 July 2010, the Commission adopted two transatlantic cooperation between BA, AA and IB, decisions in relation to air transport services. The and not the looser forms of cooperation with the first decision, in antitrust Case COMP/39.596 other members of the alliance. BA/AA/IB, made binding the commitments of- fered by (‘BA’), The Commission decision of 14 July 2010 is (‘AA’) and Iberia (‘IB’) in relation to their coopera- a commitment decision on the basis of Article 9 of tion on transatlantic routes. The second decision, in Regulation No 1/2003. In its decision, the Com- merger Case COMP/M.5747 IB/BA, cleared a con- mission concluded that the commitments offered centration between BA and IB in Phase I without by BA, AA and IB met the competition concerns remedies. that it had expressed in its preliminary assessment of the case, which was contained in the Statement The present article discusses the main issues raised of Objections that was addressed to the parties on in these investigations and highlights developments 29 September 2009. The sections below describe in the Commission’s approach towards competition the Commission’s competition concerns as ex- analysis and remedies in the passenger air transport pressed in its preliminary assessment and the com- sector. mitments that the parties offered to meet those concerns. 2. British Airways/American Airlines/ Iberia antitrust case 2.2. Relevant markets

2.1. Background Point of origin/point of destination’ (O&D) BA, AA and IB concluded a set of agreements versus network-wide market establishing cooperation on all routes served by The Commission examined a recurrent question these airlines between and North Ameri- in recent airline cases, namely whether the relevant ca (‘transatlantic routes’). In particular, the parties markets in these cases should be defined at the level agreed to coordinate prices, capacity, schedules, of airline networks rather than at the level of indi- marketing and sales, as well as to share revenues. vidual city pairs. On 8 April 2009, the Commission opened formal proceedings pursuant to Article 101 TFEU. From a demand side perspective, passengers usu- ally wish to between specific cities. Accord- All three parties are members of the oneworld al- ingly, a price increase on a flight to Palermo will liance, which is one of the three global airline alli- not generally make a passenger fly to instead. ances, the other two being the and the Hence, passengers are concerned by competitive SkyTeam alliance. The level of cooperation between conditions on a particular route, which is not sub- members of each of these alliances ranges from stitutable by other routes. On the other hand, some a relatively low degree of cooperation, involving for full-service airlines consider that they compete on example the sharing of frequent flyer programmes the basis of their networks of flights, since larger (‘FFPs’) or lounge access, to highly integrated ar- networks allow airlines to offer more destinations rangements, such as setting of common prices and and to persuade more passengers to travel via their revenue sharing. The latter types of cooperation hub airports. However, these supply-side consid- have developed partly in response to existing regu- erations are secondary for the definition of the latory barriers which prevent cross-border mergers (2) Mergers involving non-EU airlines are hampered by na- (1) The authors would like to thank the other members of the tionality clauses in bilateral air services agreements due case teams, in particular members of the Chief Econo- to which a merging airline risks losing valuable air traffic mist Team Miguel de la Mano, Mario Marinello, Szabolcs rights. Furthermore, some countries maintain explicit for- L rincz, Manuel Godinho de Matos and José Enrique eign ownership and control restrictions. Thus, the United Elías Cabrera. The content of this article does not neces- States limit foreign ownership of its airlines to 49 % and sarily reflect the official position of the European Com- foreign control to 25 %. Similarly, non-EU citizens may mission. Responsibility for the information and views ex- own only up to 49 % of EU airlines. Mergers between EU pressed lies entirely with the authors. carriers are possible thanks to EU liberalisation measures.

Number 3 — 2010 23 Antitrust relevant market (3). For a passenger wishing to trav- includes fewer stays over the weekend). Further- el on a specific route where a transaction results in more, premium passengers appeared to be much monopoly prices, it would be of little relief if the more likely to simply switch airlines in the case of same transaction strengthened the network of the a price increase rather than reduce their travel com- parties vis-à-vis their competitors. Since competition fort or the flexibility of their travel by switching to assessment deals first and foremost with the effect a lower fare class. The Commission therefore took of the transaction on consumers, demand-side the preliminary view that services provided by air- considerations are key for the purposes of market lines to these two groups of passengers belonged definition. to two separate markets.

The Commission thus provisionally concluded that The Commission used booking classes as a proxy O&D city pairs were the relevant method to define for determining the size of each of these markets. the market in the present case. This market defini- Booking classes are the main indicator which air- tion does not negate the importance of networks in lines themselves use to distinguish and price differ- the airline industry. The Commission took network entiate between premium and non-premium pas- considerations into account in its competitive analy- sengers. As it was not necessary to determine the sis, in particular when assessing the strength of the precise boundaries of the two markets in this case, airlines at the relevant hubs, the likelihood of entry the Commission calculated market shares on the by a competitor in the light of its overall network basis of the premium market, including all tickets presence and the competitive constraint imposed by except restricted Economy. one-stop flights over the airport hubs of competing airlines and airline alliances. Non-stop versus one-stop flights Premium versus non-premium passengers Air transport markets may be further segmented The Commission’s investigation identified the ex- on the basis of the distinction between non-stop istence of two distinct groups of passengers with services and one-stop services. However, the Com- different travel needs on transatlantic routes. While mission provisionally concluded that, in the present one group of passengers selects the flights prima- case, it was not necessary to determine whether rily on the basis of price (‘non-premium passen- non-stop flights and one-stop flights were in the gers’), the other group of passengers selects trips same market. The parties’ cooperation would re- on the basis of a combination of factors such as strict competition irrespective of the precise mar- shorter trip duration, ticket flexibility, price and, ket definition, since on the routes of concern given the length of the flight, travel comfort (‘pre- one-stop services were only remote substitutes 4 mium passengers’) ( ). Premium passengers are to non-stop flights. The competitive constraint usually less price sensitive than non-premium pas- imposed by one-stop services varied between the sengers. The Commission’s conclusion was based routes of concern and depended on several factors, on qualitative and quantitative evidence collected such as passenger type (premium/non-premium) throughout its investigation. In particular, an analy- and total travel time. The Commission conducted sis of the correlation of fares within the various a detailed assessment of the extent of competitive fare classes on transatlantic flights revealed that constraint imposed by one-stop services on each fares for restricted Economy tickets are not corre- route of concern. lated with fares for flexible Business tickets. More- over, a passenger survey conducted at indicated that premium passen- Airport substitution gers share common travel preferences, which differ from the travel preferences of non-premium pas- London is served by five main airports: Heathrow, sengers, particularly as regards the time when the Gatwick, London City, Luton and Stansted. The ticket was booked (which is generally closer to the Commission’s investigation indicated that demand- time of departure of the flight) and the length of side substitution and supply-side substitution be- stay at destination (which is generally shorter and tween transatlantic flights out of Heathrow and the other four London airports was likely to be in- (3) Commission Notice on the definition of relevant mar- sufficient to consider that they all belonged to the ket for the purposes of Community competition law, same relevant market. However, in this case it was OJ C 372, 9.12.1997, p. 5–13, paras. 13-14. not necessary to define the exact boundaries of the (4) While in previous cases the Commission used ‘time sensi- market, since such definition did not alter the Com- tive/non-time sensitive’ terminology to define these two mission’s competitive assessment. With respect to groups of passengers, in the present case ‘premium/non- premium’ distinction was applied to underline the impor- New York airports, the Commission provisionally tance of non-time-related considerations, in particular considered John F. Kennedy and Newark airports to travel comfort, for passengers on transatlantic routes. be substitutable.

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2.3 Competitive assessment It is interesting to note a few peculiarities of the ANTITRUST routes examined in the present case, which influ- In its preliminary assessment, the Commission con- enced the Commission’s competitive assessment sidered that the extensive level of cooperation re- and subsequent evaluation of the commitments sulting from the agreements eliminated competition offered by the parties. First, the routes of concern between the parties and restricted competition by were exclusively long-haul routes, which are quite object. In addition, the Commission found that the different from short-haul routes. For example, long- parties’ cooperation also produced anti-competitive haul operations require substantial connecting traf- effects on specific routes, which were examined in fic to fill a plane and make the further detail. viable. Furthermore, unlike many of the routes at issue in certain previous antitrust and merger cases, Concerns in relation to restrictions of the long-haul routes which were the subject of the competition between the parties present investigation were quite large in terms of passenger traffic. For example, London-New York The Commission provisionally concluded that the is the largest long-haul route in the world in terms agreements restricted competition between the par- of point-to-point passengers. Also, there was a sub- ties and resulted in anti-competitive effects on six stantial amount of high-yield premium traffic on hub-to-hub routes, where non-stop services of two most of the routes of concern. This made these of the three parties overlapped. These were five routes particularly attractive for actual or potential routes between London and U.S. cities (, competitors of the parties, if barriers to entry and , , and New York), plus the expansion on these routes were to be lowered. route between and Miami (together ‘routes of concern’). Concerns of restriction of competition between The provisional finding of anti-competitive effects the parties and third parties was based on several grounds. First, the Commis- The Commission also provisionally concluded that sion’s investigation revealed that on the routes of the agreements had the potential of creating further concern the parties were the closest competitors in restrictive effects through the parties restricting ac- terms of frequencies, schedules and service quality. cess to connecting traffic by their competitors. Second, the parties’ market position was particu- larly strong as compared to their actual and poten- As mentioned above, access to sufficient connecting tial competitors. For example, the parties’ market traffic is very important for the viability of transat- shares on the routes of concern exceeded 50 %. lantic air transport services. The parties that have The combination of the parties’ operations fur- hubs at one or both ends of the six routes of con- ther strengthened their market position. Third, the cern are important providers of connecting traffic parties’ position was protected by high barriers to to competitors operating on these routes. They can entry, in particular the lack of slots at London and provide competitors with access to connecting pas- New York airports. Other barriers to entry included sengers by concluding standard industry interline the parties’ high number of frequencies, extensive or special pro-rate agreements (6). The agreements FFPs and hub advantage at the end of the routes would add the parties’ increase in market power on of concern. the routes of concern to their strong presence on short- and medium-haul routes connecting to their The preliminary finding of anti-competitive effects hubs. The Commission’s preliminary view was that was also confirmed by the Commission’s regression this would enable the parties to restrict their com- analysis of price concentration, which showed that petitors’ access to connecting traffic travelling over the parties’ agreements would be likely to lead to an these routes, for example by restricting the terms of increase in fares for both premium and non-premi- 5 um passengers ( ). (6) Under an interline agreement, other airlines can issue tickets including a segment that they operate themselves (5) The main goal of that analysis was the statistical measure- as a well as a segment operated by the parties. For ex- ment of the strength and sign of the historical association ample, a competitor can issue a ticket for a Manchester- between price (fare) and market concentration. In par- London-New York itinerary, where the Manchester- ticular, the logarithms of ticket prices were regressed on London segment is operated by BA and the London-New the number of independent competitors (as a measure of York segment by the issuing competitor itself. The parties market concentration), and other controlling factors, such subsequently charge the issuing airline for the segment as average frequency, size, slot concentration at that they operate. The issuing airline and the parties can origin and destination cities, GDP, population, and time choose to divide the fare that is collected from the passen- effects. Separate models were set up for the fares of the ger on the basis of standard industry rules set within the restricted economy and the fully flexible business booking framework of the International Airline Travel Association classes. The estimation used standard panel data estima- (‘IATA’). They can also opt to set the terms and condi- tors (fixed effects, first differences, GMM fixed effects tions for by a tailor-made, more advantageous and first differences, and the Arellano-Bond estimator). agreement (‘special pro-rate agreement’).

Number 3 — 2010 25 Antitrust interline or special pro-rate agreements or by refus- operate one additional daily service on each of Lon- ing to enter into such agreements altogether. The don-Dallas and London-Miami, two additional daily Commission provisionally concluded that a reduc- services on London-Boston, and three additional tion in connecting passengers from the parties had daily services on London-New York. The number the potential to significantly undermine the viability of slots to be made available on a route of con- of competitors’ transatlantic services on the routes cern was to be reduced by any competitive service of concern, thereby foreclosing the markets for on this route that was added without making use of these competitors. the slots released under the commitments (8). Thus, in line with this clause, the three new services re- The Commission’s preliminary view was that the po- cently launched by and Delta tential for negative effects arising from such practices Air Lines on London-New York mean that there are would depend on route-specific factors. For each of currently no slots available on this route. However, the routes of concern, the Commission considered after adoption of the commitment decision, slots in detail the parties’ market power and the potential were available on the three other routes. Having ap- negative effect that would result from a restriction plied for slots under the commitments, Delta started of their competitors’ access to connecting traffic. In new services on London-Boston and London-Miami particular, the Commission assessed the importance on the basis of these slots in March 2011. of connecting traffic for competitors’ operations on the routes, the scope of competitors to attract con- Under the commitments, the Commission selects necting traffic from other interline or alliance part- the entrant which would offer the most effective ners if faced with a reduction in connecting traffic competitive constraint imposed on the relevant from the parties, and the potential that a reduction route. Competitors may choose to offer compensa- of connecting traffic from the parties had to restrict tion for the requested slots. However, compensation overall competition on the route of concern. is not a factor in the Commission’s competitive as- sessment of applicants’ requests for slots: it would In the light of these factors, the Commission pro- only be taken into consideration if two or more ap- visionally concluded that the potential for negative plicants were deemed to impose a similarly effective effects was most likely on the London-Chicago and competitive constraint. London-Miami routes. The Commission’s investi- gation confirmed that the operations of competi- The slot commitment essentially follows the prec- tors on those routes were particularly dependent on edents set in previous antitrust and merger cases connecting traffic provided by the parties, so that in the airline sector. However, it deviates from the a reduction of access to connecting traffic had the precedents in five principal respects. potential of significantly undermining the viability of competitors’ operations and the state of overall Compensation competition on those routes. Unlike in previous antitrust and merger cases in pas- 2.4 The commitments senger air transport, the current commitments do not preclude compensation for the release of slots. General description This is in line with the Commission’s current po- sition on slot exchanges involving monetary and The parties offered a set of commitments aimed at other consideration (9). The Commission took into addressing the competition concerns identified, pri- account the specific situation at London Heathrow, marily by removing barriers to entry and expansion where an active secondary market for slots has exist- for other airlines to operate on the routes of con- ed for many years. This airport is highly congested cern (7). Having analysed the proposed commitments and the value of traded slots reaches several millions and having market tested them, the Commission con- of euros. In these circumstances, it was considered cluded that the commitments met the competition disproportionate to exclude the possibility of com- concerns as expressed in its preliminary assessment. pensation proposed by the parties, given that it had

Slot commitment (8) Similar clauses were included in commitments in previ- ous merger cases, see for example Case COMP/M.3280 On four of the six routes of concern, the parties Air /KLM (OJ C 60, 09.03.2004), para. 1.2.3 of proposed to make slots available at either Lon- the commitments; Case COMP/M.3770 /Swiss don Heathrow or London Gatwick airports – at (OJ C 204, 20.8.2005), para. 1.2.2 of the commitments; and Case COMP/M.3940 Lufthansa/ (OJ C 18, the competitor’s choice – to allow competitors to 25.01.2006), para. 2.1.2 of the commitments. (9) See Commission’s Communication COM(2008)227 fi- (7) See the final commitments at http://ec.europa.eu/ nal on the application of Regulation (EEC) No 95/93 on competition/antitrust/cases/dec_docs/39596/ common rules for the allocation of slots at Community 39596_3882_2.pdf. airports, as amended, 30.4.2008, page 6.

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no negative impact whatsoever on the effectiveness led the parties to improve the commitments and ANTITRUST of the commitments. reduce the time-window to +/-60 minutes. First, multiple daily services are offered at London Hea- ‘Anti-gaming’ provisions throw on transatlantic routes, which makes it more important to obtain a slot at a precise time. Fur- Contrary to precedent, the commitments restrict thermore, obtaining a slot at a precise time may be a competitor from receiving slots from the par- important to a carrier with a hub at the other end ties if it already holds slots at the airport and fails of the route in order to meet its connection banks to operate them without a bona fide reason. Given at that hub. the high value of slots at the relevant airports, this provision was included to prevent competitors Restrictions on slots per hour from ‘gaming’, i.e. receiving slots under the com- mitments even though the competitor already has The commitments in some previous merger cases unused slots which it can operate to offer a com- included provisions that excluded an obligation petitive service. either to release slots at certain hours (14) or to re- lease more than a certain number of slots in a giv- 15 Slots for non-stop services en hour ( ). This was due to either environmental regulations in force or to ensure the viability of Unlike in previous remedy packages concerning the merged entity’s hub-and-spoke system. The long-haul routes where released slots could be used present commitments exclude an obligation to re- for one-stop services (10), the slots in the present lease any arrival slots before 6:20 a.m. and more case are generally available only for non-stop servic- than three slots between 6:20 and 8:20 a.m. The es on the routes of concern. However, exceptional- Commission concluded that these restrictions were ly, on the London-Dallas and London-Miami routes proportionate did not undermine the effectiveness the slots will become available also for one-stop of the commitments. services as of the IATA summer season 2013, in the event that no competitor has used them up to oper- Fare combinability and SPA commitments ate a non-stop flight. This provision was included in particular to encourage competitors to apply for The parties also offered to conclude fare combin- slots for non-stop services on these routes as early ability agreements with competitors on the routes as possible. of concern. These agreements provide for the pos- sibility for competitors to offer a return trip com- prising a non-stop transatlantic service provided by Reduced time window that competitor, and a non-stop service in the other In previous air transport cases, the parties under- direction by the parties, thus increasing the number took to make available slots within +/- 90 minutes of frequencies the competitor is able to offer. of the time requested by the applicant for long- Finally, the parties committed to enter into special haul routes (11) and between +/- 30 (12) and, recent- prorate agreements (‘SPAs’) with competitors on the ly, +/- 20 (13) minutes for short-haul routes. The routes of concern. Such agreements allow interested reasoning was that precise timing is less important airlines to attract connecting traffic from the par- on long-haul than on short-haul routes, both be- ties on favourable commercial terms. SPAs would cause peak times are longer and the constraints be available for any airline that wishes to launch new of aircraft rotation are much lower on long-haul services on the routes of concern, in particular by routes. However, two elements in the present case using slots to be released by the parties. This should give these airlines a further incentive to enter or ex- (10) See, for example, commitments in Case COMP/M.3280 /KLM (OJ C 60, 09.03.2004) and Case pand their operations on these routes. In addition, COMP/M.3770 Lufthansa/Swiss (OJ C 204, 20.8.2005). SPAs would be available for existing services of (11) Case COMP/M.3280 Air France/KLM (OJ C 60, competitors on London-Miami and London-Chica- 09.03.2004), para. 1.3.1 of the commitments; Case , in order to address the Commission’s specific COMP/M.3770 Lufthansa/Swiss (OJ C 204, 20.8.2005), concerns in relation to the availability of connecting para. 1.3.2 of the commitments. (12) Case COMP/M.3280 Air France/KLM (OJ C 60, traffic for existing competitors on these routes. 09.03.2004), para. 1.3.1 of the commitments; Case COMP/M.3770 Lufthansa/Swiss (OJ C 204, 20.8.2005), (14) Case COMP/M.3280 Air France/KLM (OJ C 60, para. 1.3.2 of the commitments; Case COMP/M.3940 09.03.2004), para. 1.3.11 of the commitments. Lufthansa/Eurowings, para. 2.2.2 of the commitments; Case (15) Case COMP/M.3280 Air France/KLM (OJ C 60, COMP/M.5364 Iberia//, para. 1.2.2 of the 09.03.2004), para. 1.3.12 of the commitments; Case commitments. COMP/M.3770 Lufthansa/Swiss (OJ C 204, 20.8.2005), (13) Case COMP/M.5335 Lufthansa/SN Airholding, para. 1.3.4 para. 1.3.11 of the commitments; Case COMP/M.5440 of the commitments; Case COMP/M.5440 Lufthansa/Aus- Lufthansa/, para. 1.1.3 (iii) of the trian Airlines, para. 1.2.2 of the commitments. commitments.

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3. Iberia/British Airways merger case and London- routes, was that the Hea- throw, Gatwick and City airports were found to be 3.1 Background interchangeable with respect to both time sensitive and non-time sensitive passengers. This conclusion, The merger between BA and IB was agreed on which is consistent with an earlier antitrust deci- in April 2010, notified to the Commission in sion of the Commission involving the same par- June 2010, and ultimately unconditionally cleared ties (19), was reached inter alia in view of the avail- on 14 July 2010 on the basis of the EU Merger able transport infrastructure between these airports Regulation. and central London, the strong correlation between fares charged by the parties for flights to the same Unlike the BA/AA/IB alliance case, which related destinations from different London airports, and to transatlantic long-haul routes, the merger inves- the existence of an adequate level of conveniently- tigation focused to a significant extent on the as- timed frequencies and cheaper airfares at London sessment of two short-haul routes: London-Madrid Gatwick. and London-Barcelona, where both parties provide non-stop services (16). In addition, the Commission investigated the impact of the merger on a number 3.3 Competitive assessment 17 of short- and long-haul routes ( ). In assessing the effects of the merger, an impor- tant aspect was that easyJet has become a well-es- 3.2 Relevant markets tablished player on both the London-Madrid and Many of the considerations on market definition London-Barcelona routes, holding nearly a third mentioned above in the context of the antitrust of all slots at London Gatwick. In addition, easyJet case apply in a similar manner on short-haul routes, maintains a base at Madrid and was, at the time of such as London-Madrid and London-Barcelona. the decision, in negotiations to open a base at Bar- However, since travel comfort is a much less deter- celona’s El Prat airport. Other players who are ac- mining factor in passengers’ decisions with regard tive on Heathrow/Gatwick-Madrid or Heathrow/ to the choice of a carrier on short-haul routes, the Gatwick-Barcelona routes with an established base Commission has traditionally distinguished time or hub presence at these airports are the Sky Team sensitive passengers from non-time sensitive pas- alliance-carrier and the low cost carrier sengers (instead of premium/non-premium passen- . The Commission’s market investigation gers) to reflect the level of time flexibility of short- showed that all these players placed strong competi- haul passengers. More specifically, and similarly to tive constraints on the merging parties. its previous merger cases dealing with short-haul Another relevant element of the competitive assess- destinations, the Commission found that time sensi- ment was that IB and BA were already cooperat- tive passengers tend to travel for business purposes, ing intensively pre-merger by way of a revenue- and require significant flexibility with their tickets (such profit sharing joint venture on the UK- bundle as cost-free cancellation and changing of the depar- of routes. This cooperation was exempted by the ture time, etc.) and are prepared to pay higher prices Commission in 2003 in the abovementioned anti- for this flexibility. Non-time sensitive customers trust exemption decision, subject to undertakings travel predominantly for leisure purposes or to visit such as the release of slots to competitors on both friends and relatives, book well in advance, do not routes. easyJet availed itself of these remedies and require flexibility with their booking and are gener- thus expanded its market presence on both routes - ally more price-conscious (18). a position that would not be materially altered after the merger if the merging parties were to request One further distinctive element of the merger case 20 at the level of product market definition, again due slots back from easyJet ( ). As a consequence, given to the short-haul character of the London-Madrid the low amount of residual competition possibly eliminated by the transaction through the coopera- (16) On London-Madrid, both parties operating non-stop tion between the parties pre-merger, as well as the services while on London-Barcelona, IB markets seats as a marketing carrier on BA-operated flights by way of (19) Case COMP/D2/38479 British Airways/Iberia/GB code-sharing. Airways. (17) On these routes one merging party offers a non-stop con- (20) The situation was different in case COMP/M.5440 nection while the other party offers a one-stop connec- Luft­hansa/Austrian Airlines, where the merging parties tion, or both parties offer one-stop connections. had transferred slots on the route - to (18) Case COMP/M.5440 Lufthansa/Austrian Airlines; their competitor with a view to complying with Ar- Case COMP/M.5335 Lufthansa/SN Airholding; Case ticle 101 TFEU. As result of the merger, Niki would have COMP/M.5364 Iberia/Vueling/Clickair (OJ C 72, had to hand these slots back and would thus effectively 26.03.2009); Case COMP/M.3280 Air France/KLM have had to exit the route. In consequence, the merger (OJ C 60, 09.03.2004); Case COMP/M.3770 Lufthansa/ between Lufthansa and Austrian Airlines was cleared sub- Swiss (OJ C 204, 20.8.2005). ject to remedies inter alia for this route.

28 Number 3 — 2010 Competition Policy Newsletter competitive strength of the parties’ competitors, the 4. Conclusion ANTITRUST Commission concluded that the merger does not give rise to competition concerns on any of these In both the BA/AA/IB antitrust case and the IB/ routes. BA merger case, the Commission adopted deci- sions on 14 July 2010not to oppose the transactions. Similarly, as regards all other short- and long-haul Whereas in the antitrust case this decision was sub- routes affected by the merger, the Commission’s ject to commitments under Article 9 of Regulation investigation showed that the merged entity will 1/2003, the merger decision was unconditional. As continue to face sufficient competition from other described above, the factual circumstances and the carriers active on these routes, and therefore pas- extent of competition concerns in each case were sengers will have adequate alternatives to fly on very different, which explains the difference in the these routes after the merger. More specifically on final decisions, despite the fact that the same two the UK/Spain-North American routes, the assess- EU carriers were involved in both transactions. As ment focused on the merger-specific effects of the these two cases demonstrate, the Commission is transaction, taking into consideration the close co- vigilant in monitoring observance of EU competi- operation that will exist between the merged entity tion rules in the air transport sector, and only inter- and AA as a result of their transatlantic cooperation venes in transactions that raise genuine competition mentioned above. concerns.

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