# C_2010278EN.01001401.xml

| 15.10.2010 | EN | Official Journal of the European Union | C 278/14 |
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15.10.2010

EN

Official Journal of the European Union

C 278/14

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Summary of Commission Decision

of 14 July 2010

relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement

(Case COMP/39.596 — British Airways/American Airlines/Iberia (BA/AA/IB))

(notified under document C(2010) 4738)

(Only the English text is authentic)

(Text with EEA relevance)

2010/C 278/09

On 14 July 2010, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’). In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003
   (1), the Commission herewith publishes the names of the parties and the main content of the decision, having regard to the legitimate interest of undertakings in the protection of their business secrets.

On 14 July 2010, the Commission adopted a decision relating to a proceeding under Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’). In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003

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the Commission herewith publishes the names of the parties and the main content of the decision, having regard to the legitimate interest of undertakings in the protection of their business secrets

| (1) | The case concerns the agreements between British Airways Plc. (hereafter ‘BA’), American Airlines Inc. (hereafter ‘AA’) and Iberia Líneas Aéreas de España SA (hereafter ‘IB’) to establish a revenue-sharing joint venture covering all their passenger air transport services on the routes between Europe and North America (hereafter ‘transatlantic routes’). The agreements provide for extensive cooperation between the parties on the transatlantic routes, which includes pricing, capacity and scheduling coordination, as well as revenue sharing. |
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(1)

The case concerns the agreements between British Airways Plc. (hereafter ‘BA’), American Airlines Inc. (hereafter ‘AA’) and Iberia Líneas Aéreas de España SA (hereafter ‘IB’) to establish a revenue-sharing joint venture covering all their passenger air transport services on the routes between Europe and North America (hereafter ‘transatlantic routes’). The agreements provide for extensive cooperation between the parties on the transatlantic routes, which includes pricing, capacity and scheduling coordination, as well as revenue sharing.

1.   Preliminary competition concerns

Preliminary competition concerns

| (2) | On 8 April 2009, the Commission initiated proceedings against BA, AA and IB, pursuant to Article 2 of Regulation (EC) No 773/2004 (2) with a view to adopting a decision pursuant to Chapter III of Regulation (EC) No 1/2003. |
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(2)

On 8 April 2009, the Commission initiated proceedings against BA, AA and IB, pursuant to Article 2 of Regulation (EC) No 773/2004 (2) with a view to adopting a decision pursuant to Chapter III of Regulation (EC) No 1/2003.

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| (3) | In a Statement of Objections of 29 September 2009, as referred to in Article 27 of Regulation (EC) No 1/2003 and Article 10 of Regulation (EC) No 773/2004, the Commission took the preliminary view that the parties’ agreements would restrict competition on specific transatlantic routes. After taking into account the parties’ reply to the Statement of Objections and other new elements, the Commission maintained its preliminary competition concerns in relation to six transatlantic routes: London-Dallas (premium (3) and non-premium (4) markets), London-Boston (premium and non-premium markets), London-Miami (premium and non-premium markets), London-Chicago (premium market), London-New York (premium market), and Madrid-Miami (premium market). |
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(3)

In a Statement of Objections of 29 September 2009, as referred to in Article 27 of Regulation (EC) No 1/2003 and Article 10 of Regulation (EC) No 773/2004, the Commission took the preliminary view that the parties’ agreements would restrict competition on specific transatlantic routes. After taking into account the parties’ reply to the Statement of Objections and other new elements, the Commission maintained its preliminary competition concerns in relation to six transatlantic routes: London-Dallas (premium (3) and non-premium (4) markets), London-Boston (premium and non-premium markets), London-Miami (premium and non-premium markets), London-Chicago (premium market), London-New York (premium market), and Madrid-Miami (premium market).

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| (4) | The Commission provisionally considered that actual or potential anti-competitive effects would arise due to restriction of competition between the parties on the above-mentioned routes. On these routes, the parties’ position was particularly strong and there were high barriers to entry or expansion, in particular lack of peak-time slots at London Heathrow/Gatwick and New York Newark/JFK airports, frequency advantage of the parties, limited access to connecting traffic and the parties’ strength in terms of frequent flyer programmes (hereinafter ‘FFPs’), corporate contracts and marketing. The agreements would eliminate competition between BA, AA and IB, which the competitors would not be able to replicate on the routes of concern. |
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(4)

The Commission provisionally considered that actual or potential anti-competitive effects would arise due to restriction of competition between the parties on the above-mentioned routes. On these routes, the parties’ position was particularly strong and there were high barriers to entry or expansion, in particular lack of peak-time slots at London Heathrow/Gatwick and New York Newark/JFK airports, frequency advantage of the parties, limited access to connecting traffic and the parties’ strength in terms of frequent flyer programmes (hereinafter ‘FFPs’), corporate contracts and marketing. The agreements would eliminate competition between BA, AA and IB, which the competitors would not be able to replicate on the routes of concern.

| (5) | In addition, the Commission provisionally concluded that the anti-competitive effects were also likely to arise due to restriction of competition between the parties and third parties. Hence, on London-Chicago and London-Miami, the agreements would result in further actual or potential anti-competitive effects by means of the parties restricting their competitors’ access to connecting traffic, which is of key importance for operations on these transatlantic routes. |
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(5)

In addition, the Commission provisionally concluded that the anti-competitive effects were also likely to arise due to restriction of competition between the parties and third parties. Hence, on London-Chicago and London-Miami, the agreements would result in further actual or potential anti-competitive effects by means of the parties restricting their competitors’ access to connecting traffic, which is of key importance for operations on these transatlantic routes.

2.   Commitment decision

Commitment decision

| (6) | BA, AA and IB proposed commitments to address the Commission's preliminary competition concerns. |
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(6)

BA, AA and IB proposed commitments to address the Commission's preliminary competition concerns.

| (7) | On 10 March 2010, a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the Commission's concerns and the proposed commitments and inviting third parties to give their observations on the commitments. On 15 April 2010, the Commission informed the parties of the observations made by third parties. On 12 May 2010 and ultimately on 25 June 2010, the parties submitted amended commitments, revised in light of the observations received from third parties. |
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(7)

On 10 March 2010, a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the Commission's concerns and the proposed commitments and inviting third parties to give their observations on the commitments. On 15 April 2010, the Commission informed the parties of the observations made by third parties. On 12 May 2010 and ultimately on 25 June 2010, the parties submitted amended commitments, revised in light of the observations received from third parties.

Official Journal of the European Union

| (8) | By decision of 14 July 2010, pursuant to Article 9 of Regulation (EC) No 1/2003, the Commission made these commitments binding upon BA, AA and IB. The main commitments can be summarised as follows. |
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(8)

By decision of 14 July 2010, pursuant to Article 9 of Regulation (EC) No 1/2003, the Commission made these commitments binding upon BA, AA and IB. The main commitments can be summarised as follows.

| (9) | First, the parties proposed to make slots available at either London Heathrow or Gatwick airports — at the competitor's choice — to allow competitors to operate up to 21 additional non-stop frequencies per week on London-New York, 14 on London-Boston, 7 on London-Dallas and 7 on London-Miami. On the London-New York route, the parties also offered to provide the competitor with matching operating authorisations at New York JFK airport. |
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(9)

First, the parties proposed to make slots available at either London Heathrow or Gatwick airports — at the competitor's choice — to allow competitors to operate up to 21 additional non-stop frequencies per week on London-New York, 14 on London-Boston, 7 on London-Dallas and 7 on London-Miami. On the London-New York route, the parties also offered to provide the competitor with matching operating authorisations at New York JFK airport.

| (10) | Second, the parties offered to enter into fare combinability agreements with competitors on the routes of concern. These agreements provide for the possibility for interested carriers, and travel agents, to offer a return trip comprising a non-stop transatlantic service provided by that interested carrier, and a non-stop service the other way by the parties. |
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(10)

Second, the parties offered to enter into fare combinability agreements with competitors on the routes of concern. These agreements provide for the possibility for interested carriers, and travel agents, to offer a return trip comprising a non-stop transatlantic service provided by that interested carrier, and a non-stop service the other way by the parties.

| (11) | Third, the parties offered to conclude special prorate agreements with competitors on the routes of concern. These agreements allow interested carriers to obtain favourable terms from the parties to carry connecting passengers on flights of the parties on short-haul routes in Europe and North America (and selected other countries) in order to ‘feed’ their own transatlantic services on the routes of concern. |
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(11)

Third, the parties offered to conclude special prorate agreements with competitors on the routes of concern. These agreements allow interested carriers to obtain favourable terms from the parties to carry connecting passengers on flights of the parties on short-haul routes in Europe and North America (and selected other countries) in order to ‘feed’ their own transatlantic services on the routes of concern.

| (12) | Fourth, the parties proposed to open their FFPs on the routes of concern to a competitor that launches or expands a service on the route and does not have a comparable FFP of its own. |
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(12)

Fourth, the parties proposed to open their FFPs on the routes of concern to a competitor that launches or expands a service on the route and does not have a comparable FFP of its own.

| (13) | Fifth, the parties offered to regularly report data to the Commission concerning the parties’ cooperation. |
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(13)

Fifth, the parties offered to regularly report data to the Commission concerning the parties’ cooperation.

| (14) | The decision finds that, in view of the commitments made binding upon BA, AA and IB, there are no longer grounds for action by the Commission. The decision shall be binding for a total period of ten years from the date of adoption. |
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(14)

The decision finds that, in view of the commitments made binding upon BA, AA and IB, there are no longer grounds for action by the Commission. The decision shall be binding for a total period of ten years from the date of adoption.

| (15) | The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 9 July 2010. On 12 July 2010, the Hearing Officer issued its final report. |
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(15)

The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 9 July 2010. On 12 July 2010, the Hearing Officer issued its final report.

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(1)  OJ L 1, 4.1.2003, p. 1.

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(2)  OJ L 123, 27.4.2004, p. 18.

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(3)  Encompassing passenger air transport services in all cabin and fare classes except services in restricted economy (i.e. at least services in first and business class).

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(4)  Encompassing passenger air transport services in restricted economy.

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