Notice pursuant to Article 5 of Council Regulation (EEC) No 3975/87 of 14 December 1987 concerning case COMP/A/38.477/D2 — British Airways/SN Brussels Airlines (Text with EEA relevance)
Date: 2002-12-10
Institutions: European Commission
Subjects: Belgium, United Kingdom, air transport, competition policy, cooperation agreement, exchange of information, transport network

C 306/4

EN

Official Journal of the European Communities

10.12.2002

Notice pursuant to Article 5 of Council Regulation (EEC) No 3975/87 of 14 December 1987 (1)
concerning case COMP/A/38.477/D2

British Airways/SN Brussels Airlines

(2002/C 306/05)

(Text with EEA relevance)

1. The application lodged by British Airways (BA) and SN

Brussels Airlines (SN)

By letter of 25 July 2002, BA and SN notified to the
Commission a number of
and
applied for negative clearance under Article 3(2) of Council
Regulation (EEC) No 3975/87 or exemption under Article 5
of the same Regulation.

cooperation agreements

passenger groups are largely complementary and on the key
overlap route, London–Brussels, passengers will continue to be
able to choose between a variety of travel options, including
Eurostar. Rather than eliminating competition, the alliance will
increase competition in Europe, as it will enable SN to compete
effectively with network alliances (such as Skyteam and Star)
and no frills airlines.

2. Main content of the agreements

the parties

intend to cooperate

their
Generally,
scheduling and
in terms of pricing,
respective networks
cooperation is
this
capacity. The parties
particularly important on London–Brussels,
through which
SN passengers will access the BA network from London. The
same goes for regional routes between the UK and Brussels,
which will give passengers access to SN's African destinations.

consider

across

that

In addition to an alliance agreement, which operates as an
‘umbrella’ agreement for general cooperation between them,
the parties have concluded the following agreements:

In the first

— a code-share agreement which allows each party to place its
flight designator code on certain flights operated by the
the parties will code
other party.
share on London–Brussels and they have
agreed in
principle to code share on other UK–Brussels routes. In
the future, the parties may explore the possibility of code
sharing on other routes,
in particular on ‘beyond and
behind’ destinations,

instance,

3.2. Improvements in the provision of airline services and promotion

of economic progress

The parties argue that
networks and customer groups.

they have largely complementary

Unlike BA, SN does not serve any destinations in America or
Asia: its only long haul routes are to destinations in Africa, the
majority of which BA has been unable to serve itself. SN is a
‘full service’ airline, which is not part of an alliance. SN needs
to offer its passengers access to a global long haul network and
BA is able to offer this in particular through its hub at London-
Heathrow. SN's customer base in Brussels will also provide
valuable feed to BA's network, thereby improving its efficiency.

3.3. Consumers will
agreement

share

the benefits

from the

cooperation

According to the parties, the alliance will benefit passenger
transport in the following areas:

— a revenue apportionment agreement setting out the method of
compensation of each airline for carrying each other's
passengers on code-shared flights.

The parties are also in the process of negotiating a frequent
flyer programme agreement, which will govern reciprocal
access to the parties' FFPs and lounges.

— wider choice of destinations and connections: by being able to
access BA's network, SN passengers will have a wider
choice of travel options at competitive prices. They will
also be able to use BA's offices worldwide to obtain
tickets and information. BA's passengers will gain easier
access to SN's African destinations which BA has been
unable to serve itself,

3. Arguments invoked by the parties in support of their

application

— code share: code sharing with BA on UK–Brussels routes will
allow SN to offer its passengers an improved service in
terms of quality, seating comfort, meal choice, etc.,

3.1. No appreciable restriction of competition

The parties argue that
the alliance agreements will not
appreciably restrict competition. The parties' networks and

(1) OJ L 374, 31.12.1987, p. 1.

— better

scheduling:

the alliance will provide the necessary
incentives for BA and SN to improve schedules
financial
on UK–Brussels
for
connecting flights from the UK to destinations in the BA
network and from Brussels to SN's African destinations,

elapsed times

reducing

routes,

10.12.2002

EN

Official Journal of the European Communities

C 306/5

— co-location and signage: the parties will also coordinate gate
allocation and ground services to offer swift connections at
Brussels national airport and London-Heathrow. Passengers
from shorter transfer
on code-share flights will benefit
efficient
times
check-in and improved ground handling,

and reduced connecting times, more

— benefits derived from frequent-flyer programmes: the parties will
put in place arrangements to allow SN and BA members to
‘earn and burn’ miles on each other's flights. They also
intend to explore the possibilities of sharing customer
profile information,
tier
status and frequent
to provide passengers
with superior service,

including seating preferences,
flyer activity,

— improved

ticketing:

the parties will work together

to
introduce reciprocal
ticketing to each other's passengers
and to integrate their systems. As a consequence, BA
agents will be able to provide prompt and complete
ticketing services to a passenger who has been issued a
ticket by SN (and conversely). Passengers on restricted
tickets will also be able to make and pay for any change
in their tickets at any BA or SN point of sale,

— reciprocal lounge products: where practicable, the parties will

introduce reciprocal lounge access.

3.4. The cooperation agreement does not

impose on the parties
restrictions which are not indispensable to the attainment of
the objectives of the agreement

The parties argue that the alliance is necessary in order for SN
to be able to offer its passengers the benefits of a global long
haul network.

The parties argue that they need to cooperate across their
respective networks
scheduling and
capacity to react dynamically to challenges in the market
place, allowing passengers to benefit fully from an improved
service on the combined networks.

in terms of pricing,

at

attractive

Fully fledged cooperation on Brussels–London is essential to
enable the parties to offer sufficient inventory to connecting
passengers
ensure SN
passengers' access to BA worldwide network. Cooperation on
to
regional UK–Brussels
optimise access
to SN's African and
European destinations.

routes
for UK passengers

equally indispensable

and therefore

fares,

is

3.5. The cooperation agreement does not afford the parties
of

competition in respect

opportunity
of
substantial part of any market

eliminating

the
a

that

The parties consider
the alliance agreements do not
eliminate competition. On the key London–Brussels route,
passengers will continue to be able to choose between a
variety of travel options, including Eurostar. Rather than elim-
inating competition, the alliance will increase competition in
Europe, as it will enable SN to compete effectively with
network alliances (such as Skyteam and Star) and no frills
airlines.

4. Conclusion

that

facie

established prima

The Commission has
the
agreements in question are caught by Article 81(1) of the
Treaty, but it has not taken a position as to the applicability
of Article 81(3). In accordance with Article 5 of Regulation
(EEC) No 3975/87, the Commission invites interested parties to
send their comments concerning the cooperation agreement
between BA and SN, within 30 days of the date of publication
of this notice, to:

European Commission
Directorate-General for Competition
Unit D2 (Transport)
Office J-70 2/236
B-1049 Brussels
Fax (32-2) 296 98 12
e-mail: Christine.Tomboy@cec.eu.int