Europe: BA/Iberia Link Approved

Europe: BA/Iberia Link Approved

A commercial alliance between British Airways and Iberia has won antitrust immunity from the European Commission, and a Brussels regulator told the Financial Times that a similar agreement between Alitalia and Air France is likely to be approved as well.

The approval indicates an abrupt change of heart by the Commission, which was reluctant to approve a codesharing pact between the French and Italian carriers last year on the grounds the near monopoly that would be created on routes between France and Italy would damage competition.

Analysts have suggested that approval of the BA-Iberia proposal would likely heighten the chances of the Air France-Alitalia merger.

Interestingly, the Commission also demonstrated enthusiasm for the proposed tie-up between Air France and KLM, even though a formal proposal is not due until early this year.

BA and Iberia received antitrust immunity for up to six years for their agreement, having offered to give up take-off and landing slots in Britain and Spain to their competitors.

BA already holds nine percent of the Spanish carrier and has two members on its board.

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