Final report of the Hearing Officer (1) in Case COMP/39.596 — British Airways/American Airlines/Iberia (BA/AA/IB)

2010/C 278/08

1.   Background

The case concerns British Airways Plc. (‘BA’), American Airlines Inc. (‘AA’) and Iberia Líneas Aéreas de España, SA (‘IB’), (hereafter collectively referred to as ‘the Parties’).

In June 2008, the Parties announced their intention to set up a revenue-sharing joint venture covering all passenger air transport services of the parties on transatlantic routes. The agreement provides for an extensive co-operation between the Parties on these routes, which includes pricing, capacity and scheduling coordination, as well as sharing of revenues. In relation to the announced co-operation, the Commission on 25 July 2008 opened an ex-officio investigation. Virgin Atlantic filed a formal complaint in this case on 30 January 2009.

The draft Decision presented to the Commission relates to competition concerns raised under Article 101 of TFEU by the agreement concluded by BA, AA and IB.

2.   Written procedure

The Commission opened formal proceedings and based on its investigation, subsequently adopted a Statement of Objections (‘SO’) on 29 September 2009. The Parties were given access to the file and a data room was organised so as to allow them to see all econometric data used in the SO.

All parties have requested an extension of the deadline within which they have to submit their responses to the SO. I have granted these requests and all parties submitted their replies on time on 9 December 2009.

Throughout the proceedings, I have admitted four interested third parties who were provided with a non-confidential version of the SO and were invited by the Commission to submit their comments.

In the absence of a request, no oral hearing was organised.

In their replies, the Parties contested that the agreement raised competition concerns but have subsequently entered into discussions with the Commission services on possible commitments to address the concerns as expressed in the SO.

The Commission launched an informal market test of the first commitments proposed by the Parties on 25 January 2010 by sending requests for information to 11 third parties, namely 10 other airline carriers and the slot co-ordinator at London Heathrow. The proposed commitments related to the six remaining routes of concern, namely London-Dallas, London-Boston, London-Miami, London-Chicago, London-New York and Madrid-Miami. These commitments include slot remedies, in the form of leases on four of these routes as well as special pro-rate agreements (‘feed’ agreements), interlining agreements (‘fare combinability’) and frequent flyer programmes (‘FFP’) on all routes. The planned duration of the proposed commitments is of 10 years.

All addressees of the informal market test submitted a response of which the Parties received non-confidential versions. In view of the responses received, BA, AA and IB offered revised commitments on 26 February 2010.

On 10 March 2010, the Commission published a notice in the Official Journal of the European Union pursuant to Article 27(4) (2), summarising the concerns and the revised commitments whilst inviting interested third parties to submit observations on this notification within one month of its publication. A total of five responses were received which were mainly from other airline carriers and travel associations.

The Commission informed the Parties of the result of the market test to which consequently, the Parties submitted further commitments.

Pursuant to Article 7(1) of Regulation (EC) No 773/2004, the Commission on 18 May 2010 informed Virgin Atlantic that it took the preliminary view that, in the event that the commitments offered by the Parties would be made binding upon them in accordance to Article 9 of Regulation (EC) No 1/2003, there would not be a sufficient degree of European Union interest for conducting a further investigation into the alleged infringement. On 15 June 2010, Virgin Atlantic submitted further comments.

On 25 June 2010, the Parties incorporated another change to the commitments previously proposed and submitted it to the Commission.

The Commission has now come to the conclusion that, in view of the final commitments, and without prejudice to Article 9(2), the proceedings should be brought to an end.

The Parties have declared to the Commission that they have each received sufficient access to the information they considered necessary to propose commitments in order to meet the concerns expressed by the Commission.

No additional queries or submissions have been made to the Hearing Officer in connection with the present case by the Parties or any third parties.

In the light of the above and bearing in mind that the decision whether or not to reject the complaint has yet to be taken, I consider that the right to be heard has been respected in this case.

(1)  Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings (OJ L 162, 19.6.2001, p. 21).

(2)  In the following, all Articles referred to relate to Regulation (EC) No 1/2003.