American Airlines, British Airways, Iberia Face Antitrust Charges

European Union regulatory authorities on Friday charged British Airways, American Airlines and Iberia Lineas Aereas de Espana SA with breaking antitrust regulations by sharing trans-Atlantic routes.

The European Commission last month sent an official notification of the charges to the three airlines and warned them that their agreement on operational and marketing coordination on trans-Atlantic rules was in violation of the regulatory framework on fair competition. American Airlines, British Airways and Iberia filed for antitrust immunity last year.

The charges refer to a trilateral agreement on coordinating the sale and operation of flights between the European Union and the United States.

British Airways, American Airlines and Iberia can now defend themselves in writing and at a hearing before the EU takes a final decision that could fine them up to 10 percent of global annual turnover if it finds them guilty of forming a cartel.

The three airlines said in a joint statement that the charges were not a surprise and they looked forward to defending "the substantial benefits for consumers that would result from our trans-Atlantic joint business." They say the planned new alliance would reduce fares and give passengers more convenient connections and better access to some 500 destinations.

The regulatory authorities announced that they were also investigating a plan to expand the alliance to jointly manage schedules, capacity and pricing on flights from Canada, Mexico, Puerto Rico, Norway and Switzerland besides the U.S. and the E.U. The investigation will also look into how the airlines plan to share revenues on such flights.

European Union competition authorities are also investigating Star Alliance, formed by Deutsche Lufthansa, Continental Airlines, United Airlines and Air Canada, and Sky Team, formed by Air France - KLM Group and Delta Air Lines.