EU opens antitrust probe into airline alliance

EU spokesman Jonathan Todd said the investigation had been opened by European Union regulators under their own initiative and did not arise from any complaints filed from the three airlines competitors.

"It is not a merger investigation and has no specific deadline," Todd said, but added EU officials will conclude their investigation as soon as possible to see whether or not the tie-up between the airlines violates EU competition rules.

If approved by antitrust regulators, the three airlines will set prices together and share seat capacity on trans-Atlantic flights.

The airlines hope they will get worldwide antitrust immunity for their deal.

The pact is the closest alliance the trio can form under strict U.S. airline ownership laws that all but rule out a full merger. It follows two earlier failed attempts by BA and AMR Corp.'s American to forge closer ties.

Rival carrier Virgin Atlantic Airways claims the deal will seriously damage the competitiveness of the lucrative trans-Atlantic route and increase fares for passengers.

The three airlines argue however that their tie-up, which includes the fellow oneworld alliance members Finnair and Royal Jordanian, would allow them to compete more effectively with other major airline alliances Star and SkyTeam, which already have antitrust immunity on trans-Atlantic flights.

BA and AMR Corp.'s American Airlines have failed in the past to win an exemption from U.S. competition laws to work more closely together because of their dominance at London's Heathrow, where the pair have more than half the capacity to and from the United States.

An exemption from the anti-competition laws would allow BA and American to run their trans-Atlantic operations as a single company, with cooperation on pricing and schedules--adding to the flight capacity and airline facilities they already share in the oneworld alliance.