British Airways, Iberia, American Airlines – Joint business agreement
British Airways, American Airlines and Iberia have received permission from the US and EU authorities to co-operate on transatlantic flights. The airlines plan to launch the transatlantic joint business this Autumn.
Information on the joint business agreement
Choose one of the following topics for more information:
- British Airways, American Airlines and Iberia - what’s it all about?
- Benefits for our customers
- Q & As
British Airways, American Airlines and Iberia - what’s it all about?
British Airways and American Airlines, with Iberia, have received regulatory approval from the US and EU authorities to be able to co-operate on transatlantic flights.
The joint business will lead to better service levels for customers. It means that customers will have access to a global network of more than 400 destinations, better scheduled travel time, more convenient connections and greater access to discounted fares by being able to book, for example BA and AA fares on ba.com.
It will also strengthen competition across the Atlantic by enabling the oneworld alliance to compete on a level playing field with the other global alliances, Star Alliance (which includes Lufthansa and United) and SkyTeam (Air France/Delta/Northwest), who already have anti-trust immunity.
The airlines plan to launch the transatlantic joint business this autumn.
Benefits for our customers
1. A combination of BA, AA and Iberia will bring more access to discounted fares.
If a customer is making a Heathrow to JFK return booking and British Airways has a cheaper fare in one direction, they will now also be able to search the other airlines' flights to find a cheaper fare for the other direction.
2. It will create a bigger and better network, supporting routes not otherwise viable.
By working together to provide links for connecting passengers, the airlines can expand customer choice by supporting routes that would not be economically viable for the individual airlines.
3. It will allow airlines to co-ordinate schedules, meaning more convenient connections.
The airlines can work together to ensure that their individual schedules complement each other making it easier for transfer passengers to connect between the different carriers.
4. It will help keep down fares by enabling cost savings.
The joint business agreement will enable the airlines to reduce costs and attract new customers.
5. It means more effective competition with the two big airline alliances, Star Alliance and SkyTeam.
The transatlantic joint business will strengthen competition across the Atlantic by enabling the oneworld alliance to compete on a level playing field with the other global alliances who already have anti-trust immunity.
6. It means a stronger business that can invest in better customer services.
This agreement will generate revenue enhancements and cost efficiencies, which will give each airline a greater ability to invest in improved products and services for customers.
Q & As
What is the joint business agreement between British Airways, American Airlines and Iberia?
It is an agreement to share revenue and reduce costs, co-ordinate networks and schedules and co-operate commercially on routes between the EU, Norway and Switzerland and the U.S, Canada, Mexico and US territories.
Why are you launching this joint business agreement?
The joint business agreement will improve customer service with better connections, network, frequency, and frequent flyer benefits. It will also enable the airlines to operate more efficiently, reducing costs and increasing their ability to invest in new products and services.
This will enable oneworld to compete more effectively with Star Alliance and SkyTeam who already have ATI across the Atlantic.
Will each airline keep its own identity?
Yes.
What will the joint business mean for customers?
- Broader transatlantic network with 91 daily flights.
- Greater access to discounted fares by being to book, for example, BA and AA fares on ba.com.
- Better alignment of schedules to provide smoother connections.
- Reciprocal frequent flier benefits on transatlantic flights.
- BA codeshares to 122 new destinations with through ticketing and through baggage and reciprocal frequent flier benefits.
- More flexible and more geographically extensive flight packages for corporate customers.
What do you mean by providing access to more discounted fares?
If a customer is making a Heathrow to JFK return booking and British Airways has a cheaper fare in one direction, they will now also be able to search the other airlines' flights to find a cheaper fare for the other direction.
When will the joint business be launched?
The airlines plan to launch the transatlantic joint business this autumn.
What are the benefits of this joint business agreement for the UK economy?
The approval of the joint business agreement with AA and Iberia will enable us as a leading member of oneworld and the UK's only global network carrier, to compete more effectively with Star Alliance and SkyTeam which have been able to integrate their operations at Frankfurt, Amsterdam and Paris.
It will provide a wider network of routes and increased connections to enable British businesses to compete more effectively in the global marketplace and strengthen Heathrow's position as an international hub airport.
What has changed since 2001 and why did you file for ATI?
Transatlantic flying has been consolidated around two powerful alliances, Star Alliance and SkyTeam, both of whom have anti-trust immunity on North Atlantic routes.
They have both added transatlantic services between Heathrow and the US since the Open Skies agreement became effective between the US and the EU.
A third strong alliance with equal regulatory footing is needed to ensure customers receive the benefits envisioned by Open Skies.
The current economic crisis is putting tremendous pressure on the entire industry and makes the need to remain competitive even more essential.
What did the Open Skies agreement change?
The agreement enables EU and US carriers to fly between any point in the US and any point in the EU, including removing the restrictions on which airlines could fly from Heathrow to the US.
Will this lead to BA and AA being dominant in the transatlantic market out of London/UK?
No. Heathrow is no longer restricted and is now open to any EU or U.S. airline wishing to operate between London and the U.S. Seven airlines fly between Heathrow and the US compared to four before Open Skies was implemented (the five new airlines are Delta, Continental, NorthWest, US Airways and Air France).
The UK to US market is highly competitive with 16 airlines competing non-stop between the two countries. In addition, there are 42 airlines competing non-stop between the EU and US.
British Airways has 41 per cent of slots at Heathrow, considerably less than other EU and US network carriers at their home bases. For example, Lufthansa has 61 percent at Frankfurt, Air France has 58 percent at Charles de Gaulle and KLM has 58 percent at Amsterdam.
The other alliances that operate across the north Atlantic, SkyTeam and Star Alliance, have antitrust immunity. The joint business will enable oneworld to compete more effectively and increase interalliance competition.
What will the joint business mean for the oneworld alliance?
It will enable oneworld to better compete better on the global stage by offering customers smoother, more convenient travel.
This is impossible for any single airline to deliver on its own and difficult for any combination of airlines that does not operate under broad-based antitrust immunity.