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Investigation of the Atlantic Joint Business Agreement

Competition Markets Authority

September 17
11:40 2020

Timetable

Action Date
Interim measures directions expire March 2024
Decision to issue interim measures directions 17 September 2020
Decision not to accept commitments 17 September 2020
Consideration of representations received in response to the consultation on commitments June to September 2020
Consultation on commitments proposed by American Airlines and International Consolidated Airlines Group closed 4 June 2020
Consultation on commitments proposed by American Airlines and International Consolidated Airlines Group 7 May 2020 to 4 June 2020
Discussions with the parties under investigation on proposals for commitments December 2019 to May 2020
Decision on whether to issue a statement of objections Winter 2019/20
CMA analysis of parties submissions and assessment Autumn 2019
Further investigation including analysis of further information requests and submissions April to Summer 2019
Decision to proceed with the investigation April 2019
Initial investigation: information gathering, including issuance of information requests, CMA analysis and review of information gathered October 2018 to March 2019
Investigation opened 11 October 2018

Change log

The following changes have been made to the case timetable since it was first published in October 2018:

Date of change Reason for change Change made to timetable
17 September 2020 The CMA decided not to accept the commitments offered by American Airlines and International Consolidated Airlines Group and instead the CMA decided to issue interim measures directions Date on which the CMA decisions not to accept the commitments and to issue interim measures were issued. Date of the interim measures expiry added
7 May 2020 The CMA is consulting on commitments offered by American Airlines and International Consolidated Airlines Group, which, if accepted, will mean that the CMA will not issue a Statement of Objections Date for commitments consultation period and estimated date for CMA decision on whether to accept commitments added
4 September 2019 Additional time needed to analyse submissions Date for CMA decision on whether to issue a statement of objections changed from summer 2019 to winter 2019
11 April 2019 Additional time needed to gather and analyse additional information Date for completing initial investigation and information gathering changed from March 2019 to summer 2019

Decisions not to accept commitments and to issue interim measures

17 September 2020: Having considered representations received in response to the May 2020 commitments consultation and as a result of the uncertainty created by the coronavirus (COVID-19) pandemic on the aviation sector, the CMA has decided that it would not be appropriate to accept the commitments offered by American Airlines and International Consolidated Airlines Group.

The CMA will not be able to complete its investigation before the expiry of various agreements currently in place pursuant to the Commissions 2010 commitments. This means that an enforcement gap (i.e. a situation whereby there are no remedies in place to address the competition issues related to the AJBA) would have arisen if action was not taken urgently on an interim basis. Such an enforcement gap would significantly negatively impact the public interest (i.e. the interests of protecting competition and, by extension, consumers). Accordingly, the CMA has decided to issue interim measures directions.

The interim measures which have been imposed effectively extend the terms of the 2010 Commitments for an additional 3 years until March 2024. Airlines currently operating slots on London to Boston, Dallas and Miami routes pursuant to the 2010 commitments will continue to operate these slots for an additional year, until March 2022.

A tender process will take place in March 2022 for these slots for the remaining two years. A tender process will be undertaken this autumn in relation to a second slot on the London to Boston route.

The interim measures issued by the CMA expire in March 2024, by which time it is expected that the airline sector should be in a more stable position. The CMA plans to complete its investigation and, if appropriate, put in place a longer-term remedy, before the interim measures expire.

Consultation on commitments

7 May 2020: The CMA has published a notice of intention to accept the commitments offered by International Consolidated Airlines Group and American Airlines and invited representations from interested third parties. The CMA is seeking views on the proposed package, but this comes at a time when the coronavirus (COVID-19) pandemic is having a major impact on the aviation sector. In the CMAs discussions with airlines, they have emphasised the importance of certainty about the future availability of slots, due to the imminent expiry of the 2010 commitments. The CMA is therefore proceeding to market test the proposed package but is also giving additional time for responses if required.

Interim measures application dismissed

30 January 2020: On 4 October 2019, Virgin Atlantic Airways Limited submitted an application to the CMA requesting that the CMA exercise its power to issue an interim measures direction to American Airlines Inc.

The CMAs final decision not to impose the requested measures was issued to Virgin Atlantic Airways Limited on 10 January 2020. This decision does not have a bearing on the outcome of the CMAs investigation into the AJBA, which remains ongoing. In the circumstances of this case and in the light of the continuing investigation, the CMA does not intend to publish a summary of its decision at this time.

Case information

On 11 October 2018, the Competition and Markets Authority (CMA) launched a competition investigation into the Atlantic Joint Business Agreement. In line with the approach of the European Commission when it first investigated the agreement during 2009 to 2010, the investigation is being conducted under the rules on agreements restrictive of competition which, for the UK, are in the Chapter I prohibition in the Competition Act 1998 and, to the extent applicable, Article 101 of the Treaty on the Functioning of the European Union.

Five airlines are currently signed up to the Atlantic Joint Business Agreement: American Airlines, Aer Lingus, British Airways, Iberia, and Finnair.

Following an investigation under EU competition law, in 2010 the European Commission accepted commitments from the parties in relation to 6 routes to address potential competition concerns: London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami. These included a commitment to make landing and take-off slots available to competitors at either London Heathrow airport or London Gatwick airport. These commitments were binding for 10 years. See the

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