The Competition and Markets Authority (CMA) has extended the terms of the current IAG / American Airlines transatlantic join business agreement by three years.
In May of this year American Airlines and IAG member carrier British Airways agreed to give up a number of London-US slots to address competition concerns.
But having considered these commitments, the CMA has ruled that “the uncertainty created by the coronavirus (Covid-19) pandemic on the aviation sector” means that it would not be appropriate to accept them at this time.
Instead it has effectively extended the current agreement (which stretches back to 2010 and was which was up for renewal in 2020) for an additional three years to March 2024, by which time the CMA said “it is expected that the airline sector should be in a more stable position”.
In the meantime the authority will complete its investigations, “and, if appropriate, put in place a longer-term remedy, before the interim measures expire”.
In a statement the CAM said:
“The CMA will not be able to complete its investigation before the expiry of various agreements currently in place pursuant to the Commission’s 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 three 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.”