- The Washington Times - Friday, August 15, 2008

LONDON | British Airways PLC, American Airlines and Spain’s Iberia SA said Thursday they have signed a revenue-sharing deal that — if approved by regulators — will see the trio set prices together and share seating capacity on trans-Atlantic flights.

The airlines are seeking worldwide antitrust immunity from U.S. authorities for the deal and they are notifying European regulatory authorities.

Gerard Arpey, chief executive of American Airlines parent company AMR Corp., thinks the deal could be approved this year.

“There aren’t any real rules or guidelines for the process, but it’s plausible it could get approved under the current administration,” Mr. Arpey said in a telephone interview with the Associated Press.

Still, even if approval by the U.S. Department of Transportation is delayed, Mr. Arpey expects the application to be processed smoothly.

“We don’t really see any significant obstacles,” Mr. Arpey said. “The facts are what they are, and the facts are on our side.”

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

“Make no mistake, if this monster monopoly is approved it will be third time unlucky for consumers,” said Virgin Atlantic President Richard Branson. “It will still be bad for passengers, bad for competition and bad for the U.K. and U.S. aviation industry.”

Mr. Arpey contended that the partnership will merely allow the trio to better compete with the other major airline alliances, Star and SkyTeam, which already have antitrust immunity on trans-Atlantic flights and a large presence at other European airports.

He noted that the Star Alliance has over 80 percent of the capacity in Frankfurt and SkyTeam holds about 65 percent in Paris.

“All we are trying to do is put ourselves to compete more competitively,” he said. “This agreement just puts us on a level playing field.”

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