The
European Commission on Wednesday said it accepted commitments from joint
venture partners Air Canada, Lufthansa and United Airlines submitted to ease
EC's antitrust concerns regarding the possibility of higher prices, especially
for premium travelers, on routes between Frankfurt and New York-area airports.
By agreeing to share revenue on those routes, the three carriers had "eliminated
competition between the parties on price and capacity," according to EC.
Submitted
for review in December, the carriers' commitments include making available to
competitors slots at those airports, providing data regarding their cooperation
to help authorities evaluate "the alliance's impact on the markets over
time," and working with competitors on fare combinability and pro-rate
agreements on affected routes. According to the commitments from Air Canada,
Lufthansa and United, fare combinability will "provide
for the possibility for [a competing airline], or travel agents, to offer a
return trip on the identified city pair comprising a nonstop service provided
one way by one of the parties and a nonstop service provided the other way by
the [competing airline]." Such deals, according to EC, would reduce "competitors'
frequency disadvantage."
"As
a result, competition on the Frankfurt-New York route will improve," EC
claimed. "After having consulted interested parties through a market test,
EC has now made these commitments legally binding on the three airlines for a
period of 10 years."
An
independent trustee will monitor those commitments. Violations could trigger an
automatic fine of up to 10 percent "of Air Canada's, United's and
Lufthansa's total turnover."
EC
added that the decision marks another "milestone in our effort to create a
level playing field on transatlantic aviation markets, following our decision on Oneworld in 2010." It continues to investigate a similar transatlantic
joint venture between SkyTeam members Delta, Air France, KLM and Alitalia.