The airlines had planned to deepen the pact to take advantage of the U.S./EU Open Skies agreement, with the focus on routes between the United States, Mexico, Canada, the EU, Norway and Switzerland.
But earlier this month European Union regulators said the latest plan may violate antitrust rules on restrictive business practices.
The Financial Times, citing documents seen by the newspaper, said on Monday the European Commission found that the proposed tie-up was likely to result in appreciable competitive harm on seven European-U.S. routes.
Remedies may include the transfer of airport slots to other carriers, the newspaper said citing comments made by the European Commission.
Alliances are seen as a lucrative alternative to mergers and large-scale investments. The three carriers have applied for U.S. government antitrust immunity for their transatlantic pact.
(Reporting by Jonathan Saul; Editing by Richard Chang)