BA Urges U.S. DOT To Ignore DOJ Objection To Transatlantic Joint Venture

British Airways this week urged the U.S. Department of Transportation to reject last month's U.S. Department of Justice objection to the carrier's proposed transatlantic joint venture with American Airlines and other Oneworld alliance partners.

The joint venture requires antitrust immunity to allow collaboration on key tasks such as setting fares and schedules, but DOJ said this would "result in competitive harm" on six key routes. In its Dec. 21 filing, the U.S. government department forecast fares on these routes to rise 15 percent without preventive measures, such as divesting joint venture partners of takeoff and landing slots.

DOJ's stance received both praise and criticism from interested parties on Monday, the deadline for responding to its filing. BA said its proposed tie-up needs unconstrained immunity to compete fairly with existing transatlantic joint ventures operated by members of Star Alliance and Skyteam.

"It is important to note that the issues raised by the DOJ are virtually identical to the DOJ's filing in the Continental/United Star alliance case, which the DOT ultimately rejected," a statement from the airline read. "We believe the DOT should reject these arguments to the Oneworld application now as they did with the Star team alliance."

Virgin Atlantic supported the DOJ objections. It cited extracts from the department's filing stating that "the likely magnitude and value of any … alleged benefits is overstated," and "given the risk of significant harm, any grant of immunity should be limited to protect competition."

Virgin called for concessions beyond those requested by DOJ. Its wish list includes forbidding joint venture partners from canceling interlining agreements with non-partner carriers and making divested slots available free of charge to competing airlines.

DOT has the final say in the United States on whether to approve the joint venture. It is unclear when it will make its decision because it has the option of seeking another round of comments from relevant parties. Across the Atlantic, the European Commission has issued a formal statement of objections ahead of its decision. It too wishes to see divestment of slots.

The routes on which the DOJ expressed particular concerns about anticompetitive dominance are London Heathrow to Boston, Chicago, Dallas, Miami and New York-JFK; and Madrid-Miami.