 What is the joint business agreement between British Airways, American Airlines and Iberia?
It is an agreement to share revenue and reduce costs, co-ordinate networks and schedules and co-operate commercially on routes between the EU, Norway and Switzerland and the U.S, Canada, Mexico and US territories.
Why are you launching this joint business agreement?
The joint business agreement will improve customer service with better connections, network, frequency, and frequent flyer benefits. It will also enable the airlines to operate more efficiently, reducing costs and increasing their ability to invest in new products and services.
This will enable oneworld to compete more effectively with Star Alliance and SkyTeam who already have ATI across the Atlantic.
Will each airline keep its own identity?
Yes.
What will the joint business mean for customers?
- Broader transatlantic network with 91 daily flights.
- Greater access to discounted fares by being to book, for example, BA and AA fares on ba.com.
- Better alignment of schedules to provide smoother connections.
- Reciprocal frequent flier benefits on transatlantic flights.
- BA codeshares to 122 new destinations with through ticketing and through baggage and reciprocal frequent flier benefits.
- More flexible and more geographically extensive flight packages for corporate customers.
What do you mean by providing access to more discounted fares?
If a customer is making a Heathrow to JFK return booking and British Airways has a cheaper fare in one direction, they will now also be able to search the other airlines' flights to find a cheaper fare for the other direction.
What are the benefits of this joint business agreement for the UK economy?
The approval of the joint business agreement with AA and Iberia will enable us as a leading member of oneworld and the UK's only global network carrier, to compete more effectively with Star Alliance and SkyTeam which have been able to integrate their operations at Frankfurt, Amsterdam and Paris.
It will provide a wider network of routes and increased connections to enable British businesses to compete more effectively in the global marketplace and strengthen Heathrow's position as an international hub airport.
What has changed since 2001 and why did you file for ATI?
Transatlantic flying has been consolidated around two powerful alliances, Star Alliance and SkyTeam, both of whom have anti-trust immunity on North Atlantic routes.
They have both added transatlantic services between Heathrow and the US since the Open Skies agreement became effective between the US and the EU.
A third strong alliance with equal regulatory footing is needed to ensure customers receive the benefits envisioned by Open Skies.
The current economic crisis is putting tremendous pressure on the entire industry and makes the need to remain competitive even more essential.
What did the Open Skies agreement change?
The agreement enables EU and US carriers to fly between any point in the US and any point in the EU, including removing the restrictions on which airlines could fly from Heathrow to the US.
Will this lead to BA and AA being dominant in the transatlantic market out of London/UK?
No. Heathrow is no longer restricted and is now open to any EU or U.S. airline wishing to operate between London and the U.S. Seven airlines fly between Heathrow and the US compared to four before Open Skies was implemented (the five new airlines are Delta, Continental, NorthWest, US Airways and Air France).
The UK to US market is highly competitive with 16 airlines competing non-stop between the two countries. In addition, there are 42 airlines competing non-stop between the EU and US.
British Airways has 41 per cent of slots at Heathrow, considerably less than other EU and US network carriers at their home bases. For example, Lufthansa has 61 percent at Frankfurt, Air France has 58 percent at Charles de Gaulle and KLM has 58 percent at Amsterdam.
The other alliances that operate across the north Atlantic, SkyTeam and Star Alliance, have antitrust immunity. The joint business will enable oneworld to compete more effectively and increase interalliance competition.
What will the joint business mean for the oneworld alliance?
It will enable oneworld to better compete better on the global stage by offering customers smoother, more convenient travel.
This is impossible for any single airline to deliver on its own and difficult for any combination of airlines that does not operate under broad-based antitrust immunity.
|
