The Oneworld alliance is offering up some take off and landing slots to fight off monopoly concerns.

British Airways, American Airlines and Iberia – Oneworld alliance – have offered slots on their transatlantic routes to appease the European Commission’s competition concerns.

The three airlines which make up the Oneworld alliance have offered six pairs of take off and landing slots at London Heathrow or London Gatwick airports on routes to Boston, New York, Dallas and Miami. 

They are hoping that this commitment will satisfy the European Commission’s inquiry – who began investigating the alliance in April 2009. In September 2009, the Commission sent a Statement of Objections to the three airlines expressing concerns that their extensive cooperation, which involves revenue-sharing and joint management of schedules, pricing and capacity, may be in breach of EU antitrust rules.

These new proposals, however, will enable other airlines to start operating transatlantic routes by lowering the barriers to entry, and the slots surrendered will compensate for the fact that the three airlines are no longer in competition.

European Commission spokeswoman Amelia Torres commented: “There will still be a choice of flights so consumers are not harmed by this deal.” She explained that the slots on offer were equivalent to 42 flights a week between London and US cities.

British Airways, American Airlines and Iberia have also said new entrants would be able to join the frequent-flyer programmes that they operate on the relevant routes, offer tickets on the parties’ flights and facilitate access to connecting traffic. They also commit to regularly submit data concerning their cooperation, which would facilitate an evaluation of the alliance’s impact on the markets over time – to be monitored by a trustee.

Virgin Atlantic’s Sir Richard Branson is understandably against the alliance – and argues that that British Airways and American Airlines would still control 100% of the international routes in and out of Dallas, 80% of those in Boston, 70% of those in Miami and 68% of those in Chicago. He said that it will destroy competition, raise prices and reduce choice on some of the busiest routes between Heathrow and the US.

Sir Richard met with Joaquin Almunia, the EU Competition Commissioner, and said: “The proposals are woefully inadequate in counteracting the anti-competitive harm of a combined BA/AA. I continue to question why the Commission is even considering these proposals to try to put right the consumer harm of this monster monopoly when it does not seem to have any evidence of concrete consumer benefits. You can’t remedy the irremediable.”

Willie Walsh, the Chief Executive of BA, said: “We’ve offered to lease slots to gain European Commission approval for our joint business which will bring benefits to our customers, shareholders and employees. It will also enable Oneworld to compete on a level playing field with the other global alliances across the Atlantic.”

Oneworld is far smaller than the two other alliances - Star Alliance, which includes Lufthansa and US Airways, is more than twice its size, and Skyteam, which includes Air France and Delta, has the greatest number of routes. They both have monopoly immunity on transatlantic flights.

The Oneworld alliance plan is also under consideration by the US Department for Transportation for the formal anti-trust immunity (ATI) status. Last month, an initial ruling from the DoT stipulated that Oneworld must give up four pairs of slots, two to Boston and two to destinations elsewhere in the US.

The proposals are now subject to a 45-day public consultation, after which Oneworld gets another 15 days to respond to any points raised.

Interested parties are invited to submit their comments to the Commission by 10 April 2010 – you can find the full version of the commitments here ^[1].